Posted in a Sarcastic Fit, but now I wonder.

Discussion in 'Economy' started by Neubarth, Dec 22, 2008.

  1. Neubarth
    Offline

    Neubarth At the Ballpark July 30th

    Joined:
    Nov 8, 2008
    Messages:
    3,751
    Thanks Received:
    199
    Trophy Points:
    48
    Location:
    South Pacific
    Ratings:
    +199
    The post below was originally posted in a fit of sarcasm when I simply could not understand the profligate spending of the Bush administration. It seemed like we were trying to spend our way to prosperity. So, I took it as a topic and posted to that effect. Oddly, some time later, I am beginning to wonder if any of this is plausable. Please read with a smile on your face.

    Joe's Economics Class 101​


    I have never studied economics. No macro and no micro. That is just as good, because the theory is all screwed up in the text books of America's colleges.

    Forget everything that you knew about money from back when the Dollar was tied to the Price of Gold. That stuff no longer applies to the American Dollar. Forget about balancing the Federal budget. That is foolishness based upon old school theory about money in circulation and the value of the dollar as opposed to a commodity such as Gold or Oil. Commodity prices should be allowed to fluctuate and their impact can be absorbed by the overall economy.

    In Joe's Economics Class 101, you will find that this is a Brave New World.

    The spending of money is not related to money in circulation. You have to separate the two. That is the first stumbling block that the American educated mind has trouble understanding. We can spend money that has not been printed. Just spend it. Issue it as increased tax returns, or just drop it into people's bank accounts via direct deposit.

    Nearly half of our Federal Debt is unfunded. In the past all we had to do was have the Treasury (Not Congress) print the money to be spent. In reality, the money did not need to be printed.

    Now, it is all handled by Electronic Fund Transfers. Your company EFT's your hard earned money to your checking account. You use your credit card to buy stuff you need and the bill is presented to your credit card company for payment. They EFT the funds to the stores account. You pay off your credit card with an EFT from your checking account. Now, was one dollar in circulation impacted? Did one dollar bill touch one person's fingertips?

    The answer, of course, is NO! Money in circulation does not relate to money being transferred in this country. The same thing applies to the Federal government books. Remember the government does not need to print money to spend it. Printed money in circulation does not equate in any way to money spent.

    I have been telling people about this for years, but none of the College educated junior economists understand. By freeing the American Dollar from any tie in with a commodity such as Gold, we have created an unlimited free money supply for Federal (but not necessarily state) needs. It does not hurt the US to spend money as long as we do not overly fund it with bonds or notes. Bonds or notes are a tie back to the old way of thinking but have now become effective instruments of foreign policy for the US. That and nothing more.

    The bonds or notes that we have printed are overseas to deliberately foist the dollar on foolish foreign governments (like China or Japan). We have been very successful in this effort. We have become the greatest foisters in world history. By doing so, we put the requirement to keep the dollar up in value against their currency in THEIR HANDS!

    Remember the balance of trade deficit. That is the reason why we sell bond and notes overseas. The idiotic overseas countries have dollars and they want to put them into something "concrete," so the foolish governments buy more highly decorated large sheet paper with their billfold sized green paper. Boy are they dumb! The logical alternative is for them to buy into the business of America and support our industrial might. We are still the leading industrial country in the world, greater than the other three industrial countries combined.

    I keep on pointing this out and college educated economists consistently ignore it. When the dollar starts to slip against the Japanese Yen, THE Japanese Central Bank comes in and props up the dollar. It is in their interests to support the dollar, or it hurts their economy.

    It is an Amazing system that we have here. School trained economists don't understand it, but I do. IF they don't prop up the dollar as opposed to the Yen, their exports go up in in price and they lose sales in the American Market. Not only that, but the Billions in bonds and notes that they have in their banks is devalued, so they hurt themselves if they do not artificially prop up the dollar.

    Call that the Double Whammy effect.

    If you want me to teach you more, I will. Check out the funding of our present national debt, and you will find out the truth. I have told people to do this for years, but they are too lazy. Most of the recent Trillions of dollars spent by the Bush administration is presently unfunded. Remember he has nearly doubled the national debt in the past seven years. Have you seen a doubling of the bonds and notes sold by the Federal government?

    Wake up America! It is a Brave New World.
     
  2. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,617
    Why does gold have value?

    What IS value?

    Answer those and get back to me, okay?
     
  3. AllieBaba
    Offline

    AllieBaba BANNED

    Joined:
    Oct 2, 2007
    Messages:
    33,778
    Thanks Received:
    3,648
    Trophy Points:
    0
    Ratings:
    +3,650
    Lol.
    I've often wondered why diamonds are valuable. THey're all over the place. But people die to get them to us.

    Chocolate, too.

    I think if our economy continues down the toilet, we may be re-evaluating what "value" is more and more.......
     
  4. Missourian
    Offline

    Missourian Gold Member

    Joined:
    Aug 30, 2008
    Messages:
    16,281
    Thanks Received:
    4,799
    Trophy Points:
    280
    Location:
    Missouri
    Ratings:
    +8,124
    It's all what people believe.

    There is as much faith involved in economics as in religion, but it is hidden in the back, next to the printer's ink.
     
    • Thank You! Thank You! x 1
  5. Againsheila
    Offline

    Againsheila Gold Member

    Joined:
    Nov 1, 2008
    Messages:
    17,126
    Thanks Received:
    2,554
    Trophy Points:
    245
    Location:
    Federal Way WA
    Ratings:
    +2,700
    I don't care how bad our economy gets...chocolate will still be valuable....Hand over the chocolate and nobody gets hurt!
     
    • Thank You! Thank You! x 1
  6. AllieBaba
    Offline

    AllieBaba BANNED

    Joined:
    Oct 2, 2007
    Messages:
    33,778
    Thanks Received:
    3,648
    Trophy Points:
    0
    Ratings:
    +3,650
    Except for the children who die bringing it to the coast.
     
  7. Paulie
    Offline

    Paulie Platinum Member

    Joined:
    May 19, 2007
    Messages:
    31,472
    Thanks Received:
    4,840
    Trophy Points:
    1,130
    Ratings:
    +15,256
    There would have to be a worldwide systemic societal disconnect from gold entirely, otherwise it will always be valuable. It has industrial uses, so it isn't entirely numismatic value.

    The only thing that would outlast gold's value is water, food, weapons, tools, and trees. There may some others, but those are the most important.

    Not everyone is willing to barter barter those essentials for other essentials, and that's where money comes into play (gold). It is a medium of trade. There will always be some form of money in society, no matter what. It is inevitable. May as well be gold. It could literally be anything society deemed valuable through its demand. Gold has always been, and always will be.
     
  8. Zoomie1980
    Offline

    Zoomie1980 Senior Member

    Joined:
    Jan 16, 2008
    Messages:
    1,658
    Thanks Received:
    128
    Trophy Points:
    48
    Ratings:
    +128
    Basically when a lot of people want something but only a few can get it, "it" becomes "valuable". Like Cabbage Patch kids back in the mid 1980's....
     
  9. Paulie
    Offline

    Paulie Platinum Member

    Joined:
    May 19, 2007
    Messages:
    31,472
    Thanks Received:
    4,840
    Trophy Points:
    1,130
    Ratings:
    +15,256
    But the thing about Cabbage Patch Kids is that they were not a finite item. They were just a fad. Their value could not last forever. Even if the fad lasted for decades, they would get less valuable over time because they were just paper and ink, and could theoretically be created to infinity. They could never be a viable source of, say, money. It's just like paper currency. If you could literally print it to infinity, then how could it ever have perpetual value? There would come a point where it would not be considered valuable anymore.

    Gold on the other hand, is different. It is finite, and has unique natural properties that make it impossible to recreate. There will always be some kind of money in society, until the end of time. Because there are essentials that people need to survive, and people will always have to acquire what they need to survive. There will always be a medium of exchange beyond barter, it is only natural. Gold is the best medium, and always will be.
     
  10. Neubarth
    Offline

    Neubarth At the Ballpark July 30th

    Joined:
    Nov 8, 2008
    Messages:
    3,751
    Thanks Received:
    199
    Trophy Points:
    48
    Location:
    South Pacific
    Ratings:
    +199
    According to Chairman Mao who wrote some very insightful commentary, "All power comes from the barrel of a gun."

    He was right of course, and as the economy continues to collapse like a big house of cards (i.e. It ain't done yet. It is just gettin' started!), more and more people are going to realize that those with guns are going to set the rules in the immediate area.

    The violent crime rate in the Inner Cities is already soaring. In Oakland California it is up nearly 80% over last year. Hungry people will rob and kill to feed their families. Their means of exchange is, of course, the GUN.

    Are you ready?
     
    • Thank You! Thank You! x 1

Share This Page