I think the molesting mod has a point. How can you take a guy seriously when he is wearing a pink/purple tie?
Anyway, brutal honesty there. Very interesting insight for people unacquainted with the harsh realities of the world of trading.
A little bit insensitive on the dreaming part though, considering the millions who will get screwed as a result of the whole deal.
Oh well, at least a few people will be very happy.
Now if you will excuse me, my tub full of bank notes is waiting for me- I need a bath.
What I heard was "I dream about people starving to death and losing their homes and lives, I fap to it every night until I lull myself to sleep."
I'm sorry but that's a sick train of thought. You hope for a disaster so you can benefit from it? What a horrible person.
That unlawful use of pepper spray was completely sickening as well. Guy just walks up sprays them and walks off like he can get away with it and blend into the crowd. That's a high ranking officer too, not just Joe Cop #5.
That video was... interesting lol. Its hard to take him serious though.
Why? He was talking mostly sense. Of course, he doesn't know the future any more than anyone else does, but that is one possible outcome. Of course, I think he was being too certain. There are a plethora of different scenarios.
One thing's for certain, these Wall Street protests were/are pretty pointless, and they're still protesting for all the wrong reasons.
I was talking about more how he presented his thoughts and his overall attitude with it. Im not saying anything about his points being valid or not. But you do need to act one way to make your points seem a bit more reliable if you get what I mean.
ed: He did'nt seem very professional I guess is the simply way of saying what I wanted to, with such a "strong" thing he was trying to say, you need that professionalism for anyone to take what you have to say serious.
@post above. Markets due regulate themselves (thats something you learn in economics 101). However, there is now so much being forced into the markets..
We tried to let markets regulate themselves, and we then turned around and had to bail out half of the American economy.
Regulations and regulators are desperately needed.
Ron Paul has some good ideas, but when it comes to the economy, he's a quack.
we never let the market regulate itself, we always had crap controlling the market which is why it cant regulate itself.
But I guess that is beside the point, though we could just let the market regulate itself, the point we are at, doing so would make the market fall apart before it would happen. so yeah as it stands you are right, but thats only because of what we have done to the market already.
we never let the market regulate itself, we always had crap controlling the market which is why it cant regulate itself.
But I guess that is beside the point, though we could just let the market regulate itself, the point we are at, doing so would make the market fall apart before it would happen. so yeah as it stands you are right, but thats only because of what we have done to the market already.
I absolutely agree, there has never been an absolutely self-regulated market in history that operated on a pristine libertarian precept. That said, there has also never been an absolutely socialist communal market in history that operated on pristine communal precept. I think it is absolutely fair to say, in both cases, ideology ultimately didn't translate well into the political reality of governance (or lack there-of) and social issues that will dog any attempt to lead (or not lead) millions or billions of people.
The prima facie issue that government is doing a poor job of regulating the market, must not be approximated to either extreme. Namely the polar opinions that:
a. Markets are unable to self-regulate at all
b. Representative governments are unable to govern anything
Where a. obviously represents the hyper-socialist far-left (no, Obama is not in this camp) and b. represents the hyper-libertarian far-right.
I like this kind of diologue and i'd like to see more of it, but it cannot come until (what I view as the high-volume) right-wingers concede that mixed economies are the most succesful model that we have a historical prescedent for and furthermore the only model that any tenured present-day economist would advocate for. Governments clearly have to handle un-profitable social ventures like keeping every person in good health. Markets clearly have to be left self-regulated enough to function in a profitable way and open/close markets as they are appropriate.
Clearly funding the housing boom via Fred and Fannie was just as much a disaster on the uptake as bailing out wallstreet in the aftermath. There have been irresponsible legislative moves by both parties in the last half a century. There are most certainly a great many of these things worth protesting and debating. What shouldn't be lost in transition; however, are the co-habitable concepts of market economics and socially responsible government. These are, in no historic reality, mutually exclusive and should be addressed in tandem.
Three professors are playing golf, a biologist, a geologist, and an economist. The golf pro stops them as they tea off and informs them they have to wait because a blind golfer is playing through. The biologist apologizes and remarks how amazing it is that a blind man can play golf. The geologist apologizes and remarks that waiting fifteen minutes is fair for the blind gent. The economist sits for a moment, obviously thinking, and then says to the golf pro: "wouldn't it be more efficient for the blind guys to play at night?"
"I want to say something but I'll keep it to myself I guess and leave this useless post behind to make you aware that there WAS something... "
-Equinox
"We're like the downtown of the Diablo related internet lol"
-Winged
That video was... interesting lol. Its hard to take him serious though.
Why? He was talking mostly sense. Of course, he doesn't know the future any more than anyone else does, but that is one possible outcome. Of course, I think he was being too certain. There are a plethora of different scenarios.
One thing's for certain, these Wall Street protests were/are pretty pointless, and they're still protesting for all the wrong reasons.
There is one outcome, the failure of fiat currency, and then the creation of a new monetary system. This is just history repeating itself, our last monetary system was the Bretton Woods agreement, before that it was the 40% gold exchange standard in the 1930's. You are witnessing the failure fiat currency, the US petrodollar and the Euro. It's not a matter of what is going to happen but rather a question of when it will happen. For those with the time and interest I would strongly recommend watching this video. Don't let the title fool you, most of it isn't about investing in gold or silver, but rather economic history, the history of money, and market patterns very compelling video.
There is one outcome, the failure of fiat currency, and then the creation of a new monetary system. This is just history repeating itself, our last monetary system was the Bretton Woods agreement, before that it was the 40% gold exchange standard in the 1930's. You are witnessing the failure fiat currency, the US petrodollar and the Euro. It's not a matter of what is going to happen but rather a question of when it will happen.
Every keynesian economist disagrees with this and in regards to fiat currency, i'd like to know how you implied history was repeating itself. Gold went out for one major reason: we have way, way, way too much currency in circulation to back with gold. Not even the entire world's supply of gold could back the dollar right now, nor could it back the euro, yen, or any other major fiat currency.
I like a lot of libertarian talking points, but the idea that everything went wrong when we went astray from the gold standard is simply not understanding the history at all. Furthermore, it would be neigh-impossible to re-implement a return to any of those gold-based agreements at present and I have yet to hear anyone argue convincingly that it could be done AND how they would do it.
I don't think there's any question that monetary policy will be changing in the wake of a global recession (it's already happening), but if you think we're on the way back to mercantilism I can only wonder why you make that assumption. And "because Ron Paul said so," isn't a good answer.
Besides, gold and silver are excessively inflated as of now. Their price already has dropped a lot, and will probably continue to sink. The smart money (that in part created the bubble) has left those metals in my personal opinion.
Rare metal are not any less fiat as a currency than dollars or euros, the only difference is their limited amounts.
Besides, both metals are best used in electronics and other practical applications, not currency.
Correct, which is why I don't find a lot of traction in anti-fiat arguments (espcially those tied to gold-standard nostalgia).
Correct, which is why I don't find a lot of traction in anti-fiat arguments (espcially those tied to gold-standard nostalgia).
Yes. The problems with fiat money have more to do with incompetent politics and policies (after all, politics in a democratic society is a popularity game, not a fact-based game) than a law of nature that states that fiat money can never work.
I like this resonance, but I must profess a little confusion. First, I understood from our previous discussions that you were a libertarian so forgive me when I ask you to clarify: Is fiat compatable with libertarianism by your understanding of it's propositions? And if so, do you recognize a fundamental diffirence between US libertarian views and the broader libertarian ideology, which i'd have to historically trace back to middle european economists?
(I apologize if my assertion of your libertarianism is misleading or out-right incorrect, but i'm dying to hear what your take is given what i've read from you before.)
Well, I'm well aware that the term "libertarian" has quite strong connotations in the US political field. I personally use the word "libertarian" as a broader umbrella term composing several sub-schools of ideology, all focused around individual liberty. So in essence, I'd say that there is a distinction between the broader term "libertarian" and the specific "US libertarian".
In the US. -- as far as I've understood -- it is more commonly referring to a specific bloc, with very specific political theses. So when I say that I'm a libertarian, I mean that I agree to several core philosophies within it, but not that I'd think akin to Ron Paul, as an example.
I simply mean that I can pick up a Paterson or Rand (or similar author's) book and find many agreeable ideas in there.
While i'm highly allergic to many of Rand's soapbox issues I can certainly appreciate your distance from Paul's libertarianism (and that's precisely what I wanted to tease out). The way you explain libertarian ideology it sounds a lot more like the mixed political systems that already exist in the US and Europe than the "true libertarian society," talked about by politicans. If I could press you further to provide any other readings you felt were instrumental in founding your convictions (other than Rand, with whom i'm familiar) that would be very insightful and appreciated.
But then on the other hand, I, for one, do not think that a complete abolition of state is possible. My viewpoint is terribly European, and more specifically Nordic. The state here is a lot larger in comparison tho the states. Public healthcare, public education (even on university level!), and various kinds of state intervention in economic affairs is the norm.
In my personal ideal state, the minimal state would provide goods and services that it can provide more efficiently than a market due to various externalities. For example, the justice system (a market couldn't provide a fair justice system, since achieving justice would become synonymous with possessing monetary assets).
I think this is something that we agree on completely. I describe myself as a socialist in roughly the same way you describe yourself as a libertarian. There are ideas of Marx, Engles, Trotsky, etc. with which I find a lot of merit, but I don't find a lot of mental traction with my study of history when it comes to the particulars of implementing centrally controlled economies, totally communal self-direction, and the true communist state.
My ideal state would function roughly the same way: By providing what the market simply cannot reasonably provide, by providing a stable currency, by ensuring the health, education, and logistical necessities of the public who would otherwise not have access to it, and by giving justice a rational medium through wich to be expressed.
That same minimal state would also govern a fiat currency. Ideally, the governance would be minimal, and fairly neutral. The fiat currency, in my opinion, is the least bad currency that has been conceived so far. I think it's completely possible if not even likely that the system is replaced by a different system in the future, but in today's world I think fiat is the most functional system.
Indeed, fiat currency is the best of the bad options we have and I like the notion there could be a more effective future development that might reform or replace fiat currency as we know it.
As far as I've understood, you teach history, so you probably won't resist if I reason all this by saying that a more economically advanced -- or rather complex -- society has generally been a more well-being society without reciting too much general history. Even if we think of all the misery and injustice in post-industrialized societies (which suffered colossal transitions as the number of people required in agriculture decreased), we must probably agree that in the big picture, the society in 1850 was a much more well-being society than the society in 1750, let alone the society in 1950 compared to 1850.
Yes, I teach history and I would agree with your assertion. By in large societies have, since the industrial revolution, moved towards the well-being of society as a whole. To what we might attribute this progress would be subject to a lively and lengthy debate, but i'll rest on the laurel that we more converge on this point than not.
And a complex economy requires a working currency. And I've yet to see a good case for any other currency model than the fiat system in work right now.
That is exactly the point I think we have both made. The problem that i'm alluding to is where this is being left behind by self-proclaimed libertarians in the US (and elsewhere, as I am aware of a similar school of thought in the UK - if not the eurozone proper)? I think that a libertarian movement the way you describe it could be a true marriage of leftist social values [human rights and freedoms] with the right-leaning fiscal responsibility [limiting government to the spheres where they are truly appropriate and effective] that currently divides the intelligent electorate in my country (nevermind the ideological idiots who vote based on their religion or their total disdain for private property).
I'd personally love to find and promote this middle-ground to level-headed thinkers in my own sphere of influence where neither libertarianism (as we know it in the US) or the status quo draw a lot of support. I think that there is a huge (for lack of a better word) market for this new (or old) libertarian view. Perhaps, in the US case, we would need to look for a new name.
Well, to me libertarianism or alternatively liberalism is mostly about so called negative rights: private property rights, civil and political rights, fair trial, freedom from violent crime, freedom of worship and so forth.
The sources from where I've built my own concept of libertarianism are the grand philosophers such as Locke, Hume, Voltaire, Montesquieu and Smith, to name a few. Then I'd add the obvious 20th century grand names of philosophy, mainly Russell and Popper.
Ah, well then I find another similarity between us. I don't have the breadth of knowledge of those philosphical works a man of law might have, but I have read and appreciate all the wonderful authors you've listed. I suppose I was looking for a particular economist that you may have been envoking without my knowledge, but that not being the case doesn't hinder our arrangement in the least.
Well, I'm personally strongly in favor of capitalism and the free market, but I'd probably still be labeled a socialist in the US by some. I think education and health are also best handled by the state, in some areas supplemented by private entities.
I personally believe in something I'd label "pragmatic altruism", that is, the reasoning to state-run education is not so much equality and happiness in my opinion, but an utilitarian point that the society as a whole benefits from such policies. As an example, it is beneficial to the society that access to higher education is based on individual potential, not the thickness of their parents' wallets.
I'm just as strongly for the free market, but I pivot my support for capitalism on the lever of humanist necessity. I'm not entirely prone to pragmatism (too much advocating and protesting in my life to claim that), but I agree the necessity for public education, healthcare, and the like is more a question of getting the most out of society than getting the most for society (although I think the two go hand in hand). Unfortunately you would certainly be branded a socialist for your views here in the US. That, I think, is largely a function of high-volume misconceptions about liberalism (i'll try to refrain from the left-right refrences which are too much a regional thing) and could, in some part, be laid to rest if this coherent libertarian/liberal principal could be established and promoted here for the rational folks that will listen.
The only problem is, as I said, that popular vote is not a rational fact-based exercise. Real, sensible arguments come second into voting based on irrational feelings (such as personal opposition to concept X (say, gay marriage), or wanting to vote someone promoting similar religious values (say, heterosexuality), etc.). All such notions are petty compared to large political choices (such as: What is the future of the eurozone? How will the US. handle its debt?).
The sad truth is that an opinion does not necessitate knowledge on the subject at hand. I've noticed myself becoming more and more cynical towards the power of the democratic system to create rational decisions (opposed to technocracy or similar "elitist" social systems).
This much is true and i've alluded to these groups who vote for logically indefensible positions, but I do know there is a functional part of the electorate which does have an ear for meaningful discourse rather than hyperbole over rote-opinion issues. I find myself in similar consitutions of mind: cynical, apathetic, perhaps a little envious of meritocracy. Having said that, I still demand of myself (and perhaps this is my life as a professor taking hold) an expression of resilience in the face of this morass and try to work with the system to improve it's function. To that end, I believe (as I have said) that there is a good deal of fruit to yeild from the position of espousing both an economically sound and liberally responsible party, platform, or ideology.
I think any ideology that could unite the thinking men and women would be a step in the right direction.
Every keynesian economist disagrees with this and in regards to fiat currency,i'd like to know how you implied history was repeating itself.
Sure all Keynesian's disagree, all they know how to do is stimulate the economy by flooding the system with fiat liquidity. That model has never worked over any extended period of time, in fact it didn't even work for John Maynard Keynes! There were numerous "new deals" under FDR, all of them failed!It was WWII that brought us out of the depression, not Keynesian economics. It wasn't just the fact people went back to work that made the US richest nation in the world. During WWII we sold weapons to the rest of the allies for gold under the "Cash and Carry program" after we drained the work of its gold, then we continued the program under the "Lend Lease program" where we demanded payment at a later time. Keynesian economics didn't help Japan in their lost decade, in truth they never recovered despite applying Keynes principles again and again. All you have to do is look at the trash bin of failed fiat currency, even long before Lord Keynes came out with his ideas; fiat currency's track record was always100% failure, not one has stood the test of time. The US dollar became the world’s reserve currency in 1944 because we had all of the world’s gold in Ft. Knox, because the dollar was good as gold every nation in the world pegged their currency to the dollar. No Keynesian want's to consider the economics of Friedrich Hayek or many of those before him.
Gold went out for one major reason: we have way, way, way too much currency incirculation to back with gold. Not even the entire world's supply of gold could back the dollar right now, nor could it back the euro, yen, or anyother major fiat currency.
No that's not why gold went out on August 15th 1971 under Nixon's executive order. France was emptying our vaults of gold under the Bretton Woods agreement (the last time our monetary system failed) because they didn't think we could pay for the Vietnam War (they were right, we have yet to) and Nixon severed the tie to gold to stop France. It really would be very easy to go back to a goldstandard, if you watch the video you will see that gold has already risen in price on its own to cover every dollar ever printed twice in the US history alone. They could simply revalue gold to cover every dollar printed which would as the video points out place gold at about $20,000 an ounce today. This isn't pie in the sky non-sense it's happened many times throughout history and as I mentioned earlier twice in the US alone in just the last 100 years.
They could easily put us on a true 1:1 gold standard by issuing serial numbers for every micro-gram of revalued gold, just like every dollar bill has serial numbers. You could even use your debit card with it to transfer serial numbers, they already do this in Utah where gold has been once again legalized as money and there is legislation in 13 other states to do the same thing. I think there is a very real chance you will see a gold standard emerge from this financial mess. Look through the news archives for the last few years, central banks are buying gold, not selling it. If they don't think it's money then why are they buying it? The reason gold is a good standard isn't because gold is something great, it's just a precious metal. It's what gold does that makes it a good control mechanism, it prevents unfettered borrowing, it restrains the FED's printing press, and it controls paper manipulation and thus rampant corruption. Paper manipulation is exactly what caused this economic crisis.
I don't think there's any question that monetary policy will be changing in the wake of a global recession (it's already happening), but if you think we're onthe way back to mercantilism I can only wonder why you make that assumption. And "because Ron Paul said so," isn't a good answer.
Monetary policy is changing right now, but not for the better. What governments are doing is destroying their currencies by debasing them. Because the correction in 2008 was prevented the market is littered with companies that have inflated P/E ratios and dividends groveling around all-time lows when it should be the other way around. No one in their right mind is going to invest in an asset which cannot be properly valuated. For the last 40 years 8 Presidents and 20 Congresses have wielded fiduciary responsibility like irresponsible teenagers handed their first credit card with no spending limit. Some of the very same politicians who helped create the current financial mess over these decades now arrogantly purport to have the solution.
Market corrections are called corrections for a reason, they help to correct over inflated markets. Corrections are a natural and necessary mechanism which helps correct imbalances in free markets. You don’t stop corrections from happening any more than you would stop an exhausted person from resting. Yet this is exactly what President Bush, Congress, and the Federal Reserve did in 2008. Three years and trillions of dollars later our economy is stuck in Japan style stagflation and the FED still holds up zombie banks stuck in a liquidity trap with the support of President Obama, and Congress. Since markets were not allowed to correct as they should, real unemployment still persists at 23% when you properly include long term discouraged workers. The notion we can print or borrow our way out of this mess is folly.
Godzilla stands at our door once again, the OCC’s Quarterly Derivatives Report Q1 for 2011 shows the corrupt and incompetent banks have racked up $244 TRILLION dollars in derivatives! There are $244 trillion in chips on the table right now and only about $14 trillion in the world's casino cage to pay out! Someone is going to be very disappointed! These financial WMD’s we’re the fuel that burned the stock market in 2008. If even a fraction of these collapses, the next crash will be game over. Who’s going to bail us out then? The Frank Dodd Act is toothless and not one politician has lifted a finger to put the Glass Steagall Act back in place.
We have printed more dollars in the last 3 years than all the prior dollars printed in our countries history. Further we have a trade imbalance now with China that is simply unsustainable. This economic downturn is different than the great depression. The media unfortunately ignores completely some of the most profound differences between this downturn and the great depression.
During the great depression the US:
Was the largest creditor nation in the world
The largest producer and exporter of goods
Operated on a 40% gold exchange standard
US Dollar didn't permeate the entire world as it does today
Didn't have 78 million retiring baby boomers
Didn't have $14,000,000,000,000 in debt
Didn't have $60,000,000,000,000 in underfunded programs coming due
Despite these differences people still draw direct comparisons to the great depression. It's the above fundamental differences that make gold and silver an excellent protection against paper currency. Why would anyone want paper right now? If you save a dollar you're losing money at about 8% to inflation, oh sure Bernanke always references core inflation being low, but core inflation excludes food and fuel, add that in and inflation is much higher, Bernanke is lying. Why would anyone trust their retirement in 401/K's when most are wrapped up in mutual funds on the now ever so unstable Wall Street? Why would anyone want to hold bonds? Its debt, an IOU! Their yields are lower than real inflation and does anyone believe that the US will really pay back all that debt with interest? People fail to realize all US currency is created from debt, you can pay down all the debt with all the money in the world and you will still have debt because every dollar ever created either by the FED or Fractional Reserve Banking must paid back PLUS interest. The world governments are playing with fire right now and corrupt bankers are laughing at them as they milk the rest of the wealth out of the system at our expense.
The cold truth is in the numbers, 78/M boomers are retiring into a tax base of 51/M Gen-X. We're not paying anything down and we're not going to grow our way out of this mess until Gen-Y starts entering the workforce which is about 20 years. Never before in history have so many people bet their retirement on Wall Street in 401K mutual funds (MF). MF's out number public companies 2:1. What happens when retirees are required to start cashing out as required by the ERISA act in 2016? What happens when people who need to live off that money start cashing in? What happens when there are more sellers than buyers? It's not just the US, any country that fought in WWII have this same demographic problem.
Sure all Keynesian's disagree, all they know how to do is stimulate the economy by flooding the system with fiat liquidity. That model has never worked over any extended period of time, in fact it didn't even work for John Maynard Keynes!
Except the orignial keynesian models are still quite accurate and it has become (along with new keynesian stuff i'm not aware of) the industry standard, so to speak. You should know that nobody but Ron Paul and his fans actually buy into the Austrian Economic model (not even the Austrians).
No that's not why gold went out on August 15th 1971 under Nixon's executive order.
Correct, but how do you think it got pressured down from gold standard to bretton woods to fiat? The currency was getting too big to be backed and factional lending schemes only compound that problem. Attempts to return to the gold standard have always been thwarted by better judgment.
They could easily put us on a true 1:1 gold standard by issuing serial numbers for every micro-gram of revalued gold, just like every dollar bill has serial numbers.
You realize gold is used for things other than currency and it is a volatile comodity, yes? Are you trying to solve problems here or create them? I have heard this wacky logic before and trust me when I say: nobody who knows economics supports that. Ron Paul is a politican and a medical doctor, and I do admire his voting record on a lot of things, but he really has it wrong on this.
Markets are correcting today as they have been, more or less, since we've had them. Godzilla is no more here than he has been living in New York harbor since the 19th century. We printed money because it's the keynesian thing to do and that has been our monetary policy for quite some time. Yes, we're in record debt. That isn't news, nor is managable debt relative to GDP that bad (we're way beyond that, but i'm just saying it for the record). We have a grossly inflated entitlement program scheme to thank for that, along with two of the longest wars in our history.
If you want to make a case that the entire debacle is the fault of Bernake, Greenspan, the Fed, I think you'll have a pretty hard time of it. As most economists will tell you, fiat is the best of the poor currency options we have.
If you want a bit of sobering wake up watch what this day trader has to say on BBC (I'll guarantee he'll never get invited on American TV). He just leaves everyone in the television studio speechless and aghast. No one should be shocked by what is going to happen in the coming year.
As it stands, the USA is DEEP in debt, if anything this guy has been told to spread his nonsense so the USA can make a lot of profit off EU banks in trouble...
Greece has an issue, yes.
Spain has an issue, yes.
The other countries, not really.
These pigs make me sick. Tell me you wouldn't sleep better tonight knowing that at least a couple of these pigs got punched in the face a few times.
Anyway, brutal honesty there. Very interesting insight for people unacquainted with the harsh realities of the world of trading.
A little bit insensitive on the dreaming part though, considering the millions who will get screwed as a result of the whole deal.
Oh well, at least a few people will be very happy.
Now if you will excuse me, my tub full of bank notes is waiting for me- I need a bath.
I'm sorry but that's a sick train of thought. You hope for a disaster so you can benefit from it? What a horrible person.
That unlawful use of pepper spray was completely sickening as well. Guy just walks up sprays them and walks off like he can get away with it and blend into the crowd. That's a high ranking officer too, not just Joe Cop #5.
Also, NYTimes prob not on the side of the cops. Linkage
ed: He did'nt seem very professional I guess is the simply way of saying what I wanted to, with such a "strong" thing he was trying to say, you need that professionalism for anyone to take what you have to say serious.
@post above. Markets due regulate themselves (thats something you learn in economics 101). However, there is now so much being forced into the markets..
Regulations and regulators are desperately needed.
Ron Paul has some good ideas, but when it comes to the economy, he's a quack.
But I guess that is beside the point, though we could just let the market regulate itself, the point we are at, doing so would make the market fall apart before it would happen. so yeah as it stands you are right, but thats only because of what we have done to the market already.
But...it's not...
Greedy fucks need to be regulated. And every last one of those guys in Wal $treet is a greedy fuck.
Don't get me wrong, it's not bad to try to make a living. But it is bad to try to make a buck and destroy the Gulf of Mexico.
I absolutely agree, there has never been an absolutely self-regulated market in history that operated on a pristine libertarian precept. That said, there has also never been an absolutely socialist communal market in history that operated on pristine communal precept. I think it is absolutely fair to say, in both cases, ideology ultimately didn't translate well into the political reality of governance (or lack there-of) and social issues that will dog any attempt to lead (or not lead) millions or billions of people.
The prima facie issue that government is doing a poor job of regulating the market, must not be approximated to either extreme. Namely the polar opinions that:
a. Markets are unable to self-regulate at all
b. Representative governments are unable to govern anything
Where a. obviously represents the hyper-socialist far-left (no, Obama is not in this camp) and b. represents the hyper-libertarian far-right.
I like this kind of diologue and i'd like to see more of it, but it cannot come until (what I view as the high-volume) right-wingers concede that mixed economies are the most succesful model that we have a historical prescedent for and furthermore the only model that any tenured present-day economist would advocate for. Governments clearly have to handle un-profitable social ventures like keeping every person in good health. Markets clearly have to be left self-regulated enough to function in a profitable way and open/close markets as they are appropriate.
Clearly funding the housing boom via Fred and Fannie was just as much a disaster on the uptake as bailing out wallstreet in the aftermath. There have been irresponsible legislative moves by both parties in the last half a century. There are most certainly a great many of these things worth protesting and debating. What shouldn't be lost in transition; however, are the co-habitable concepts of market economics and socially responsible government. These are, in no historic reality, mutually exclusive and should be addressed in tandem.
Three professors are playing golf, a biologist, a geologist, and an economist. The golf pro stops them as they tea off and informs them they have to wait because a blind golfer is playing through. The biologist apologizes and remarks how amazing it is that a blind man can play golf. The geologist apologizes and remarks that waiting fifteen minutes is fair for the blind gent. The economist sits for a moment, obviously thinking, and then says to the golf pro: "wouldn't it be more efficient for the blind guys to play at night?"
har har
-Equinox
"We're like the downtown of the Diablo related internet lol"
-Winged
There is one outcome, the failure of fiat currency, and then the creation of a new monetary system. This is just history repeating itself, our last monetary system was the Bretton Woods agreement, before that it was the 40% gold exchange standard in the 1930's. You are witnessing the failure fiat currency, the US petrodollar and the Euro. It's not a matter of what is going to happen but rather a question of when it will happen. For those with the time and interest I would strongly recommend watching this video. Don't let the title fool you, most of it isn't about investing in gold or silver, but rather economic history, the history of money, and market patterns very compelling video.
(You can jump forward about 3 minutes in to get past the intro, you won't miss anything by doing so)
http://www.youtube.com/watch?v=tj2s6vzErqY&feature=player_detailpage#t=149s
Every keynesian economist disagrees with this and in regards to fiat currency, i'd like to know how you implied history was repeating itself. Gold went out for one major reason: we have way, way, way too much currency in circulation to back with gold. Not even the entire world's supply of gold could back the dollar right now, nor could it back the euro, yen, or any other major fiat currency.
I like a lot of libertarian talking points, but the idea that everything went wrong when we went astray from the gold standard is simply not understanding the history at all. Furthermore, it would be neigh-impossible to re-implement a return to any of those gold-based agreements at present and I have yet to hear anyone argue convincingly that it could be done AND how they would do it.
I don't think there's any question that monetary policy will be changing in the wake of a global recession (it's already happening), but if you think we're on the way back to mercantilism I can only wonder why you make that assumption. And "because Ron Paul said so," isn't a good answer.
Correct, which is why I don't find a lot of traction in anti-fiat arguments (espcially those tied to gold-standard nostalgia).
I like this resonance, but I must profess a little confusion. First, I understood from our previous discussions that you were a libertarian so forgive me when I ask you to clarify: Is fiat compatable with libertarianism by your understanding of it's propositions? And if so, do you recognize a fundamental diffirence between US libertarian views and the broader libertarian ideology, which i'd have to historically trace back to middle european economists?
(I apologize if my assertion of your libertarianism is misleading or out-right incorrect, but i'm dying to hear what your take is given what i've read from you before.)
While i'm highly allergic to many of Rand's soapbox issues I can certainly appreciate your distance from Paul's libertarianism (and that's precisely what I wanted to tease out). The way you explain libertarian ideology it sounds a lot more like the mixed political systems that already exist in the US and Europe than the "true libertarian society," talked about by politicans. If I could press you further to provide any other readings you felt were instrumental in founding your convictions (other than Rand, with whom i'm familiar) that would be very insightful and appreciated.
I think this is something that we agree on completely. I describe myself as a socialist in roughly the same way you describe yourself as a libertarian. There are ideas of Marx, Engles, Trotsky, etc. with which I find a lot of merit, but I don't find a lot of mental traction with my study of history when it comes to the particulars of implementing centrally controlled economies, totally communal self-direction, and the true communist state.
My ideal state would function roughly the same way: By providing what the market simply cannot reasonably provide, by providing a stable currency, by ensuring the health, education, and logistical necessities of the public who would otherwise not have access to it, and by giving justice a rational medium through wich to be expressed.
Indeed, fiat currency is the best of the bad options we have and I like the notion there could be a more effective future development that might reform or replace fiat currency as we know it.
Yes, I teach history and I would agree with your assertion. By in large societies have, since the industrial revolution, moved towards the well-being of society as a whole. To what we might attribute this progress would be subject to a lively and lengthy debate, but i'll rest on the laurel that we more converge on this point than not.
That is exactly the point I think we have both made. The problem that i'm alluding to is where this is being left behind by self-proclaimed libertarians in the US (and elsewhere, as I am aware of a similar school of thought in the UK - if not the eurozone proper)? I think that a libertarian movement the way you describe it could be a true marriage of leftist social values [human rights and freedoms] with the right-leaning fiscal responsibility [limiting government to the spheres where they are truly appropriate and effective] that currently divides the intelligent electorate in my country (nevermind the ideological idiots who vote based on their religion or their total disdain for private property).
I'd personally love to find and promote this middle-ground to level-headed thinkers in my own sphere of influence where neither libertarianism (as we know it in the US) or the status quo draw a lot of support. I think that there is a huge (for lack of a better word) market for this new (or old) libertarian view. Perhaps, in the US case, we would need to look for a new name.
Agreed. We shall have to save that great wall project for another day.
Ah, well then I find another similarity between us. I don't have the breadth of knowledge of those philosphical works a man of law might have, but I have read and appreciate all the wonderful authors you've listed. I suppose I was looking for a particular economist that you may have been envoking without my knowledge, but that not being the case doesn't hinder our arrangement in the least.
I'm just as strongly for the free market, but I pivot my support for capitalism on the lever of humanist necessity. I'm not entirely prone to pragmatism (too much advocating and protesting in my life to claim that), but I agree the necessity for public education, healthcare, and the like is more a question of getting the most out of society than getting the most for society (although I think the two go hand in hand). Unfortunately you would certainly be branded a socialist for your views here in the US. That, I think, is largely a function of high-volume misconceptions about liberalism (i'll try to refrain from the left-right refrences which are too much a regional thing) and could, in some part, be laid to rest if this coherent libertarian/liberal principal could be established and promoted here for the rational folks that will listen.
This much is true and i've alluded to these groups who vote for logically indefensible positions, but I do know there is a functional part of the electorate which does have an ear for meaningful discourse rather than hyperbole over rote-opinion issues. I find myself in similar consitutions of mind: cynical, apathetic, perhaps a little envious of meritocracy. Having said that, I still demand of myself (and perhaps this is my life as a professor taking hold) an expression of resilience in the face of this morass and try to work with the system to improve it's function. To that end, I believe (as I have said) that there is a good deal of fruit to yeild from the position of espousing both an economically sound and liberally responsible party, platform, or ideology.
I think any ideology that could unite the thinking men and women would be a step in the right direction.
No that's not why gold went out on August 15th 1971 under Nixon's executive order. France was emptying our vaults of gold under the Bretton Woods agreement (the last time our monetary system failed) because they didn't think we could pay for the Vietnam War (they were right, we have yet to) and Nixon severed the tie to gold to stop France. It really would be very easy to go back to a goldstandard, if you watch the video you will see that gold has already risen in price on its own to cover every dollar ever printed twice in the US history alone. They could simply revalue gold to cover every dollar printed which would as the video points out place gold at about $20,000 an ounce today. This isn't pie in the sky non-sense it's happened many times throughout history and as I mentioned earlier twice in the US alone in just the last 100 years.
They could easily put us on a true 1:1 gold standard by issuing serial numbers for every micro-gram of revalued gold, just like every dollar bill has serial numbers. You could even use your debit card with it to transfer serial numbers, they already do this in Utah where gold has been once again legalized as money and there is legislation in 13 other states to do the same thing. I think there is a very real chance you will see a gold standard emerge from this financial mess. Look through the news archives for the last few years, central banks are buying gold, not selling it. If they don't think it's money then why are they buying it? The reason gold is a good standard isn't because gold is something great, it's just a precious metal. It's what gold does that makes it a good control mechanism, it prevents unfettered borrowing, it restrains the FED's printing press, and it controls paper manipulation and thus rampant corruption. Paper manipulation is exactly what caused this economic crisis.
Monetary policy is changing right now, but not for the better. What governments are doing is destroying their currencies by debasing them. Because the correction in 2008 was prevented the market is littered with companies that have inflated P/E ratios and dividends groveling around all-time lows when it should be the other way around. No one in their right mind is going to invest in an asset which cannot be properly valuated. For the last 40 years 8 Presidents and 20 Congresses have wielded fiduciary responsibility like irresponsible teenagers handed their first credit card with no spending limit. Some of the very same politicians who helped create the current financial mess over these decades now arrogantly purport to have the solution.
Market corrections are called corrections for a reason, they help to correct over inflated markets. Corrections are a natural and necessary mechanism which helps correct imbalances in free markets. You don’t stop corrections from happening any more than you would stop an exhausted person from resting. Yet this is exactly what President Bush, Congress, and the Federal Reserve did in 2008. Three years and trillions of dollars later our economy is stuck in Japan style stagflation and the FED still holds up zombie banks stuck in a liquidity trap with the support of President Obama, and Congress. Since markets were not allowed to correct as they should, real unemployment still persists at 23% when you properly include long term discouraged workers. The notion we can print or borrow our way out of this mess is folly.
Godzilla stands at our door once again, the OCC’s Quarterly Derivatives Report Q1 for 2011 shows the corrupt and incompetent banks have racked up $244 TRILLION dollars in derivatives! There are $244 trillion in chips on the table right now and only about $14 trillion in the world's casino cage to pay out! Someone is going to be very disappointed! These financial WMD’s we’re the fuel that burned the stock market in 2008. If even a fraction of these collapses, the next crash will be game over. Who’s going to bail us out then? The Frank Dodd Act is toothless and not one politician has lifted a finger to put the Glass Steagall Act back in place.
We have printed more dollars in the last 3 years than all the prior dollars printed in our countries history. Further we have a trade imbalance now with China that is simply unsustainable. This economic downturn is different than the great depression. The media unfortunately ignores completely some of the most profound differences between this downturn and the great depression.
Sure all Keynesian's disagree, all they know how to do is stimulate the economy by flooding the system with fiat liquidity. That model has never worked over any extended period of time, in fact it didn't even work for John Maynard Keynes! There were numerous "new deals" under FDR, all of them failed!It was WWII that brought us out of the depression, not Keynesian economics. It wasn't just the fact people went back to work that made the US richest nation in the world. During WWII we sold weapons to the rest of the allies for gold under the "Cash and Carry program" after we drained the work of its gold, then we continued the program under the "Lend Lease program" where we demanded payment at a later time. Keynesian economics didn't help Japan in their lost decade, in truth they never recovered despite applying Keynes principles again and again. All you have to do is look at the trash bin of failed fiat currency, even long before Lord Keynes came out with his ideas; fiat currency's track record was always100% failure, not one has stood the test of time. The US dollar became the world’s reserve currency in 1944 because we had all of the world’s gold in Ft. Knox, because the dollar was good as gold every nation in the world pegged their currency to the dollar. No Keynesian want's to consider the economics of Friedrich Hayek or many of those before him.
During the great depression the US:
The cold truth is in the numbers, 78/M boomers are retiring into a tax base of 51/M Gen-X. We're not paying anything down and we're not going to grow our way out of this mess until Gen-Y starts entering the workforce which is about 20 years. Never before in history have so many people bet their retirement on Wall Street in 401K mutual funds (MF). MF's out number public companies 2:1. What happens when retirees are required to start cashing out as required by the ERISA act in 2016? What happens when people who need to live off that money start cashing in? What happens when there are more sellers than buyers? It's not just the US, any country that fought in WWII have this same demographic problem.
$244 TRILLION in derivatives bombs, 20x all the money in the world, page 24 - Table 1
OCC QuarterlyDerivatives Report Q1/11
http://www.occ.treas.gov/topics/capital-markets/financial-markets/trading/derivatives/dq111.pdf
FED Charts
The US monetary base (parabolic rise, not 1971 after gold was removed from our money is where the money base started climbing like no tomorrow. This chart starts in 1918 and passes through the great depression, WWII, and everything else.)
http://research.stlouisfed.org/fred2/series/AMBNS?cid=124
Money Multiplier (velocity of money is tanking)
http://research.stlouisfed.org/fred2/series/MULT?cid=2
MZM Money stock cash available ($10 trillion available and no one is lending)
http://research.stlo...d2/series/MZMNS
Velocity of MZM Money Stock (velocity of money is tanking)
http://research.stlouisfed.org/fred2/series/MZMV?cid=32242
Currency in Circulation (ever expanding)
http://research.stlouisfed.org/fred2/series/WCURCIR?cid=32215
Reserve Bank Credit (ever rising)
http://research.stlouisfed.org/fred2/series/RSBKCRNS?cid=342
Excess Reserves of Depository Institutions (ever rising)
http://research.stlouisfed.org/fred2/series/EXCRESNS?rid=19
US Treasury tables
Historical Debt Outstanding – Annual (has never gone down)
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm
Government Accountability Office GAO
The Federal Government's Long-Term Fiscal Outlook: January 2011 Update
http://www.gao.gov/new.items/d11451sp.pdf
Except the orignial keynesian models are still quite accurate and it has become (along with new keynesian stuff i'm not aware of) the industry standard, so to speak. You should know that nobody but Ron Paul and his fans actually buy into the Austrian Economic model (not even the Austrians).
Correct, but how do you think it got pressured down from gold standard to bretton woods to fiat? The currency was getting too big to be backed and factional lending schemes only compound that problem. Attempts to return to the gold standard have always been thwarted by better judgment.
You realize gold is used for things other than currency and it is a volatile comodity, yes? Are you trying to solve problems here or create them? I have heard this wacky logic before and trust me when I say: nobody who knows economics supports that. Ron Paul is a politican and a medical doctor, and I do admire his voting record on a lot of things, but he really has it wrong on this.
Markets are correcting today as they have been, more or less, since we've had them. Godzilla is no more here than he has been living in New York harbor since the 19th century. We printed money because it's the keynesian thing to do and that has been our monetary policy for quite some time. Yes, we're in record debt. That isn't news, nor is managable debt relative to GDP that bad (we're way beyond that, but i'm just saying it for the record). We have a grossly inflated entitlement program scheme to thank for that, along with two of the longest wars in our history.
If you want to make a case that the entire debacle is the fault of Bernake, Greenspan, the Fed, I think you'll have a pretty hard time of it. As most economists will tell you, fiat is the best of the poor currency options we have.
Well, I really hope those cops get what they deserve eventually.
As it stands, the USA is DEEP in debt, if anything this guy has been told to spread his nonsense so the USA can make a lot of profit off EU banks in trouble...
Greece has an issue, yes.
Spain has an issue, yes.
The other countries, not really.
http://www.youtube.com/watch?v=Q-w-8fXzwQE
It's really, quite an eye opener.
All of society runs on debts, and the banks simply own everything in the world.
Author of: Random Ravings of Warcraft