Gold Standard

[Seos]

Half way through the lecture now. What I described is not growth deflation as that lecture describes! Growth deflation is when due to growth more is produced and the price of goods fall, this makes sellers ask for a lower price from suppliers and that makes them have to lower their costs including money wages (real wages may rise or fall).
What I described is that process in reverse order, in this case due to technological advance suppliers have lower costs and therefore lower their price to sellers who then lower their price for consumers, there is no fall in wages and there is a rise in real wages! Perhaps development-deflation is what this should be called if the other one is growth deflation.

I'll finish listening to the lecture before expanding on the consequences of that difference between what happened at the end of the 19th century and growth deflation as the lecture defines it.

Right I've finished now, I'll deal with a few other things in the lecture before expanding

Ok just like people on this thread his example of using the printing press is using that printing press to buy consumer goods. Nobody does that anymore and nobody thinks that that is a good idea. He does not deal with the consequences of using the printing press as a reallocative tool for funding capital goods.

He mentions in the first half of the lecture that 'variations have an effect on the real economy.' cantion(sp?) effects he calls them. However he later says that deflation does not entail any economic problem. Surely if it does.

He says if there was an unforeseen mass bankruptcy that is not a problem because only the owners change, bankruptcy is not bad he suggests. That is a classic case of thinking economically but not logically. This would have massive implications for workers, consumer sentiment, investor sentiment and as a result of those things for the economy, He seems to see crisis in the current system as a genuine crisis but any crisis in his system is just something that will be recovered from. He doesn't mention the world unemployment once in relation to an unforeseen mass bankruptcy.

He says deflation is only a political problem because it only changes the owners and the governments. I'll keep it short and simple: changing the owners and government changes the economy.

He says hoarding does not reduce growth, if we follow on from that logically then investing does not increase growth. That shows how ridiculous that suggestion is

He calls deflation a process of creative destruction. Those two words should never be used together in this way they can justify anything if you let them. "Creative destruction" happens because of mankind's ability to bounce back, almost anything can be called creative destruction because mankind can bounce back from almost anything.
After listening to that lecture I am more then ever against the Austrian school of thought.


Also what the fúck is with the propaganda at the start, it has no place in an academic lecture! It is disgusting and if Austrian economics was the only true economics then it wouldn't be necessary.

[Irish Liberty Forum]

"He says deflation is only a political problem because it only changes the owners and the governments. I'll keep it short and simple: changing the owners and government changes the economy."

Yes, it's does change the economy. It's the economic solution to excess debt, mismanagement and malinvestments. So he's right to say that it's only a political problem, not an economic problem.

[Irish Liberty Forum]

"He mentions in the first half of the lecture that 'variations have an effect on the real economy.' cantion(sp?) effects he calls them. However he later says that deflation does not entail any economic problem. Surely if it does."

Cantillon effects: the money is pumped into the economy at particular points, thus diverting real resources to those sectors. This is very important, particularly in contradiction to the Chicago School's money equation and general perspective which appeared to overlook the effects of inflation on an economy's structure of production.

[Seos]

They are wrong.

Prove it.

Well, you're saying that by using paper money, gold is freed up for other uses. Which is true. Maybe you personally would prefer not to use gold as money. But you've got no argument there for anyone else not to do that.

Yes that is what I'm saying, so gold having other uses is a reason to be against it being used as money rather than a reason for. If other people think other reasons outweigh this reason not to use gold then that is another matter.

...do you know by what percentage fiat currencies increase?

Whatever amount you want sugar.

The gold standard implies sustainable economic growth with falling prices and a stable supply of money. No boom/bust cycle required. It's impossible to legislate against human error but it's clear that some systems punish it while others encourage it.

You just said it wasn't stable. How does it imply economic growth?!

You're right: it's huge, politically connected organisations stealing from savers, the poor and middle classes.

Hmm maybe these people should band together in some sort of union and ask for wage increases in line with inflation?

How do you have a dictatorship without a state?

When a state fails a new one emerges. The most well know failure of a state would be the Weimier Republic.

You haven't understood the point. Read what I wrote again.

If you think I didn't understand your point then you misunderstand my point.

On this island coconuts are all the consumer goods and coconut trees are all the capital goods. The only way to have growth in the future is to increase production of coconuts in this case the only way to do that is to plant another tree.
So printing the money has lead to a positive that is the whole point. If you want to argue that the growth would have happened anyway show me why. If you want to argue that the growth is bad growth then show me.

[Irish Liberty Forum]

"He says hoarding does not reduce growth, if we follow on from that logically then investing does not increase growth. That shows how ridiculous that suggestion is"

Define what you mean by growth?

[Irish Liberty Forum]

On this island coconuts are all the consumer goods and coconut trees are all the capital goods. The only way to have growth in the future is to increase production of coconuts in this case the only way to do that is to plant another tree.
So printing the money has lead to a positive that is the whole point. If you want to argue that the growth would have happened anyway show me why. If you want to argue that the growth is bad growth then show me.

I'm sorry, you're out of your depth. I've explained this already and you're repeating the same mistake.

[Seos]

"He says deflation is only a political problem because it only changes the owners and the governments. I'll keep it short and simple: changing the owners and government changes the economy."

Yes, it's does change the economy. It's the economic solution to excess debt, mismanagement and malinvestments. So he's right to say that it's only a political problem, not an economic problem.

He was referring to bankruptcies due to deflation and not being able to pay debts because of deflation, the businesses and government are otherwise soundly managed and a good investment.

I'm sorry, you're out of your depth. I've explained this already and you're repeating the same mistake.

Do you understand the difference between consumer goods and capital goods?
What point are you even trying to make?
The point I was trying to make is that printing money can if used wisely have positive effects and I believe I've shown it.

[Irish Liberty Forum]

Prove it.

I'm not going to go to work for you any more, sorry.

Yes that is what I'm saying, so gold having other uses is a reason to be against it being used as money rather than a reason for. If other people think other reasons outweigh this reason not to use gold then that is another matter.

Yeah. Do you realise that this is not an argument against the gold standard?

Whatever amount you want sugar.

That's just rude. I'm almost finished with you.

You just said it wasn't stable. How does it imply economic growth?!

Hmm maybe these people should band together in some sort of union and ask for wage increases in line with inflation?

When a state fails a new one emerges. The most well know failure of a state would be the Weimier Republic.

These is all over the place, I'm gonna bail out now. Good luck in your studies.

[20000miles]

Right I've finished now, I'll deal with a few other things in the lecture before expanding

Ok just like people on this thread his example of using the printing press is using that printing press to buy consumer goods. Nobody does that anymore and nobody thinks that that is a good idea. He does not deal with the consequences of using the printing press as a reallocative tool for funding capital goods.

Sure they do. Whenever a government needs to pay either their employees they can simply resort to "creating" the money electronically.

He mentions in the first half of the lecture that 'variations have an effect on the real economy.' cantion(sp?) effects he calls them. However he later says that deflation does not entail any economic problem. Surely if it does.

Cantillon effects. People who get newly created money get to spend it first before prices rise, while those poor people at the bottom get the money last when prices have already risen. So the beneficiaries under today's regime is a redistribution from the poor, to those favoured by the government (eg contractors). Those who benefit in a deflationary scenario are those who purchase money. in short, it isn't arbitrary.

He says if there was an unforeseen mass bankruptcy that is not a problem because only the owners change, bankruptcy is not bad he suggests. That is a classic case of thinking economically but not logically. This would have massive implications for workers, consumer sentiment, investor sentiment and as a result of those things for the economy, He seems to see crisis in the current system as a genuine crisis but any crisis in his system is just something that will be recovered from. He doesn't mention the world unemployment once in relation to an unforeseen mass bankruptcy.

He says deflation is only a political problem because it only changes the owners and the governments. I'll keep it short and simple: changing the owners and government changes the economy.

Yes, it changes the economy by making it more in line with consumer preferences, and transfers capital to those who can manage it properly.

He says hoarding does not reduce growth, if we follow on from that logically then investing does not increase growth. That shows how ridiculous that suggestion is

The most important thing he notes is that hoarding is simply a perjorative for saving. An increase in the demand for money to get an increased PP of money just changes the relative prices for goods.

Also where can investment come from if not from savings?

He calls deflation a process of creative destruction. Those two words should never be used together in this way they can justify anything if you let them. "Creative destruction" happens because of mankind's ability to bounce back, almost anything can be called creative destruction because mankind can bounce back from almost anything.
After listening to that lecture I am more then ever against the Austrian school of thought.

That's too bad. At least you tried, and you can now proudly say you know more about AE than Paul Krugman.

Also what the fúck is with the propaganda at the start, it has no place in an academic lecture! It is disgusting and if Austrian economics was the only true economics then it wouldn't be necessary.

There is only one physics, chemistry and evolution. Darwinianism and Lemarckian evolution can't both be right. Neither can there be more than one economics.

[Seos]

I'm not going to go to work for you any more, sorry.

Shame I was hoping you could prove everyone in charge of the economy right now wrong. I guess I'll have to take their word for it now.

Yeah. Do you realise that this is not an argument against the gold standard?

You do realise that gold's non-monetary uses are not an argument for the gold standard?

That's just rude. I'm almost finished with you.

How is it rude? It's being light-hearted and pointing out that the central bank knows exactly how much will be printed.

These is all over the place, I'm gonna bail out now. Good luck in your studies.

See you back on the forum the next time the gold standard is being debated here! Aufwiedersehen!