Stable Economy

[BillSPrestonEsq]

I will say that if we changed over to the type of economic system I described, we would have deflation at first,

no dear we would have constant depression and stagnation!! Any increase in GDP, with a constant money supply, would mean deflation and so a huge incentive to put off all purchases until tomorrow when prices will be lower. Is this really over your head??????????????? Its Econ 101, class one day one. Sorry.

Ahhh yet more unwarranted douchebaggery... Please tell me why the demand for the dollar would rise if the supply rose with population??? That is the same amount of dollars per capita. That means land values would continue to rise as well as the value of other finite resources, as they should. It also means that prices of goods would remain the same unless influenced by some other force. Would you rather have constant inflation as we do now? Why save money when interest rates are lower than the rate of inflation? Just buy, buy, buy, that is until the next credit crunch where the wealthy can aquire more land, more resources, more goods at the expense of the struggling middle class.

 

[BillSPrestonEsq]

GDP is in my opinion not an accurate measurement of anything other than what it describes. It is not a accurate measurement of true growth or of a higher standard of living or lack therof.

dear, china just switched to Republican capitalism from liberal communism. People are getting rich rather than starving to death. What do you think happened to GDP??????????????? You must think before you write!!

How would you adjust the money supply to GDP?

just as all central banks do, by adjusting interest rates to control the amount of money and so the price level. What you want is basic commodities like a loaf of bread to have the same price over time so that price comparisons can be made to show when one manufacturer is getting sloppy or inefficient and must raise prices to cover up his mistakes. In this way the economy becomes more and more efficient and our standard of living rises. When you have deflation as you want meaningful price comparisions are impossible because the price changes reflect monetary policy errors rather than manufacturer errors. This is Econ 101, class one day one!! Sorry.

Ok so a loaf of bread has not remained a constant. The price of bread has obviously risen by leaps and bounds over the last 100 years. So if the job of the FED is to maintain stable prices then they have failed miserably. So something is clearly wrong with the FED and your argument. Actually nothing you have said to me makes any sense. Mathematically if you have a money supply that is tied to population you have a constant per capita dollar amount in the economy. Prices would be stable and no one would be waiting for tommorow to buy, because tommorow the prices will be lower. It just wouldn't happen. Even in the deflationary spirals we experience in our current system that doesn't happen. People are more cautious of buying non essentials yes, but waiting for the price of a loaf of bread to drop, no. Those deflationary spirals we see are caused by our monetary policy, that's what happens when the credit goes away, it all falls apart, until you pump more money into the economy, and then you just get inflation and then repeat until complete destruction of the currency. Yeah sounds good let's stick with that...

 

[BillSPrestonEsq]

I will say that if we changed over to the type of economic system I described, we would have deflation at first,

no dear we would have constant depression and stagnation!! Any increase in GDP, with a constant money supply, would mean deflation and so a huge incentive to put off all purchases until tomorrow when prices will be lower. Is this really over your head??????????????? Its Econ 101, class one day one. Sorry.

I agree will Bill. The money supply would be adjusted using a formula like the one Milton Friedman created.
Yes, spending will slow and savings would increase. But we would have real growth through investing in production.

Yes, thank you. I have never seen the formula you are talking about but I would like to. If you have a link please let me know. Milton Friedman is a genius.

 

[akelch]

no dear we would have constant depression and stagnation!! Any increase in GDP, with a constant money supply, would mean deflation and so a huge incentive to put off all purchases until tomorrow when prices will be lower. Is this really over your head??????????????? Its Econ 101, class one day one. Sorry.

I agree will Bill. The money supply would be adjusted using a formula like the one Milton Friedman created.
Yes, spending will slow and savings would increase. But we would have real growth through investing in production.

Yes, thank you. I have never seen the formula you are talking about but I would like to. If you have a link please let me know. Milton Friedman is a genius.

http://www.investmentsandincome.com/money/money_theory.html

[ame]http://www.amazon.com/gp/aw/d/B000GSKNSU[/ame]

 

[akelch]

Great thread!!! Glad to see real solutions being presented for our economy.

 

[EdwardBaiamonte]

Ok so a loaf of bread has not remained a constant. The price of bread has obviously risen by leaps and bounds over the last 100 years. So if the job of the FED is to maintain stable prices then they have failed miserably.

dear, the job of the Fed is to maintain stable prices and inflate the currency to create jobs. The job of the Fed should be to maintain stable prices, not to create jobs too. Got it now????

So something is clearly wrong with the FED and your argument.

what?????????????????????

Actually nothing you have said to me makes any sense.

this is because you are an economic illiterate. NOt even Econ 101. Sorry

Mathematically if you have a money supply that is tied to population you have a constant per capita dollar amount in the economy. Prices would be stable

too stupid of course and again perfectly 100% illiterate. If you have new inventions and new productivity the amount of goods for sale goes up!! Without a money supply increase you get deflation and depression. Too few dollars chasing to many goods!! Got it now??

and no one would be waiting for tommorow to buy, because tommorow the prices will be lower. It just wouldn't happen. Even in the deflationary spirals we experience in our current system that doesn't happen. People are more cautious of buying non essentials yes, but waiting for the price of a loaf of bread to drop, no.

bread you need today, but anything you don't need today you'd be stupid to buy today if the price will be lower tomorrow. Is that really over your head?? In Zimbabwe they'd charge you before the meal because the price might well be higher after the meal at a restaurant.

Those deflationary spirals we see are caused by our monetary policy, that's what happens when the credit goes away, it all falls apart, until you pump more money into the economy, and then you just get inflation and then repeat until complete destruction of the currency. Yeah sounds good let's stick with that...

what???????? gibberish????????????

 

[BillSPrestonEsq]

Ok so a loaf of bread has not remained a constant. The price of bread has obviously risen by leaps and bounds over the last 100 years. So if the job of the FED is to maintain stable prices then they have failed miserably.

dear, the job of the Fed is to maintain stable prices and inflate the currency to create jobs. The job of the Fed should be to maintain stable prices, not to create jobs too. Got it now????

So something is clearly wrong with the FED and your argument.

what?????????????????????



this is because you are an economic illiterate. NOt even Econ 101. Sorry


too stupid of course and again perfectly 100% illiterate. If you have new inventions and new productivity the amount of goods for sale goes up!! Without a money supply increase you get deflation and depression. Too few dollars chasing to many goods!! Got it now??

and no one would be waiting for tommorow to buy, because tommorow the prices will be lower. It just wouldn't happen. Even in the deflationary spirals we experience in our current system that doesn't happen. People are more cautious of buying non essentials yes, but waiting for the price of a loaf of bread to drop, no.

bread you need today, but anything you don't need today you'd be stupid to buy today if the price will be lower tomorrow. Is that really over your head?? In Zimbabwe they'd charge you before the meal because the price might well be higher after the meal at a restaurant.

Those deflationary spirals we see are caused by our monetary policy, that's what happens when the credit goes away, it all falls apart, until you pump more money into the economy, and then you just get inflation and then repeat until complete destruction of the currency. Yeah sounds good let's stick with that...

what???????? gibberish????????????

"dear, the job of the Fed is to maintain stable prices and inflate the currency to create jobs. The job of the Fed should be to maintain stable prices, not to create jobs too. Got it now???? "

So the FED's job is to maintain stable prices and inflate the currency to create jobs? But oh wait their job is to maintain prices, not create jobs?

Yeah, I got it now, well said..

"too stupid of course and again perfectly 100% illiterate. If you have new inventions and new productivity the amount of goods for sale goes up!! Without a money supply increase you get deflation and depression. Too few dollars chasing to many goods!! Got it now??"

If a company creates a way to make a product for less money then either they sell it for less and sell more or they sell the same amount and make more profit. Either way wealth for the whole economy has been generated. A cheaper IPad is not going to sink the economy into some deflationary spiral.

"bread you need today, but anything you don't need today you'd be stupid to buy today if the price will be lower tomorrow. Is that really over your head?? In Zimbabwe they'd charge you before the meal because the price might well be higher after the meal at a restaurant."

In Zimbabwe too many "dollars" were created which eventually caused hyper-inflation. I shouldn't have to explain how this is not even relevant to you argument. You are so far from having a clue, thanks for the lesson "teach".

 

[EdwardBaiamonte]

So the FED's job is to maintain stable prices and inflate the currency to create jobs? But oh wait their job is to maintain prices, not create jobs?

Yeah, I got it now, well said..

dear, the Fed has what we call a dual mandate: stable prices; low unemployment. GOt it now?????????????

If a company creates a way to make a product for less money then either they sell it for less and sell more or they sell the same amount and make more profit. Either way wealth for the whole economy has been generated. A cheaper IPad is not going to sink the economy into some deflationary spiral.

If I disagreed I'll pay you $10,000. Bet????


"bread you need today, but anything you don't need today you'd be stupid to buy today if the price will be lower tomorrow. Is that really over your head?? In Zimbabwe they'd charge you before the meal because the price might well be higher after the meal at a restaurant."

In Zimbabwe too many "dollars" were created which eventually caused hyper-inflation.

IF I disagreed I'll pay you $10,000. Bet or run away with your strawman between your legs.