Re: Please tell me why...

From: Johnny Marcos (johnny5_at_yahoo.com)
Date: 07/06/04 

Date: Tue, 06 Jul 2004 05:31:12 GMT

"jpathogan" <jpathogan@comcast.net> wrote in
news:WbpGc.31689$7t3.17350@attbi_s51:

> Do you know what causes inflation? If you think you do, then
> enlighten the rest of us.

I will try - correct my mistakes if I am wrong - price rises because
market demand for a good goes up - given non changing supply - or market
supply goes down given non changing demand - or because the money in
circulation inflates with no change in demand or supply or some mix of
all of these like is the reality in a dynamic world.

> If the government had procured all the
>> money it needed for rearmament by taxing the citizens, the increased
>> demand on its part would have been counteracted by a drop in the
>> purchases of the taxpayers. The expanded military consumption would
>> have been neutralized on the market by a restriction in civilian
>> consumption.
>
> Here I would agree with Mises. There is only so much money to go
> around for a given economy, and if substantial amounts of it are spent

Right.

> on destructive purposes, ie, the military, then it naturally follows

War machines are bad.

> that there is less for constructive purposes. When money is spent to
> blow up houses instead of constructing houses, then that is money
> badly spent. (Just so that you'll get my drift here,)

I agree.

  I think that
> the espression "creative destruction" is an oxymoron.

Yes.

> I have never advocated the unlimited issuance of currency, only that
> which could be productively engaged. And there is plenty that can be
> productively engaged.

Mosler advocates floating currency. As long as demand goes up for us
dollars and treasuries in the world market - PRINT MORE.

>> But with inflation the additional demand of the armed forces comes on
>> top of the non-decreased demand of the public and makes prices soar.
>
> Why has this not happened yet? Just asking a question....

Umm, my prices have went up - just a bit right now - but remember in the
1940's I think people had a hard time getting eggs or meat - perhaps
military demand is just a drop in the ocean right now - but if we start
funding war machines it will go up - that hurt Rome back in the day.

>> http://www.mises.org/efandi/ch18.asp
>>
>> It has been asserted that Nazism is the fruit of the vast German
>> inflation of 1923. That is not quite correct. It would be more
>> correct to say that the great inflation and the Nazi scourge both
>> derived from the mentalities and the doctrines that long dominated
>> German public opinion. The State, which the German socialist
>> Ferdinand Lassalle had already proclaimed as god, was supposed to be
>> able to achieve anything.
>
>
> I do not believe in any "god". "Gods" are things that people create to
> supplant their deficiency in understanding nature. (And no, I do not

World views are good to understand

http://anthro.palomar.edu/social/soc_2.htm

Those who have an indigenous world-view believe that humans are not
separate from nature and the supernatural. Living creatures and non-
living objects in nature as well as supernatural beings are thought to be
human-like in their motivations, feelings, and interactions. They all
are perceived as "thous" rather than "its." Animals, trees, rocks,
spirits, and gods all possess human characteristics and can be involved
with humans and their everyday concerns much the same way as other
people. Even "inanimate" things in nature such as rocks are thought to
potentially have human-like personalities. In other words, there is not
a separation of people, nature, and the spirit world. Rather, there is
an emotional involvement between them. Things in all three of these
realms of existence can interact together just as humans do with each
other. Indigenous world-views are common in small-scale relatively
isolated societies such as those of foragers, pastoralists, and
horticulturalists.

> claim to understand all the natural processes, only that there is a
> reason for all things, whether we understand them or not.) But there
> is a REASON why things happen. It is not magic!

Arthur C Clarke had some ideas on magic.

> Certainly the "state" is not a god. If anything, the state is the

Right, the state has limits - it can only do so much for you citizen -
the germans thought it could protect them from economic problems.

> opposite of a god, in that one of the primary purposes of the state is
> to be secular, so that it can be the unbiased referee in disputes
> involving religion.(The most bloody disputes in all of history are
> those involving religious disputes, and not a single person can safely
> say who is right.)

Very true - the bin ladens don't want the state referee disputes - israel
and its nieghbors just want to blow each other up - to hell with a
referee - kill em all - let allah sort them out.

  That is why the First Amendment exists, and why
> the body of the Constitution prohibits "any religious test from being
> administered as a condition of holding office or public trust..."
>
> Try reading the Constitution if you want to know what my beliefs are.

Jefferson said that constitution was only good for a moral and just
people - the world is a dynamic place - requiring dymanic solutions.

>> The omnipotent State was credited with the magic power of unlimited
>> spending without any burden on the citizenry.
>
> But there is a burden on the citisenry. It exists when money is
> created and spent on things that do not benefit the citizenry.

Right, the ancient romans got tired of funding a war machine so rome
died.

>> > Why not simply print the money, and see what happens? Do you think
>>
>> No Hitler - History already shows what happens.
>
> So now I'm Hitler. Not long ago, I was Marx, It's gets mighty
> confusing, I tell you.

I feel your pain brother - if all the answers were easy and clear it
would be so simple - what works today may not work tomorrow - if anything
works at all - sigh. Funding a war machine has never been good for the
worlds people from what I have read in history - much better to build
libraries and get people to go to them in thier new 200 dollar nikes.

Hyperinflation was the result of funding hitlers war machine - which was
caused by greedy investors with short sightedness - they tried to print
thier way out of the problem - FDI is going up in china - not a good
thing in my book. Still mosler says as long as thier is demand for the
dollars and treasuries - print away - he makes compelling points.

> Look: One of the other principle purposes of the state is to provide
> the citizens with a standard of measure against which to gauge their
> economic status. This is called "money,"

Right, green iou's that need to accurately reflect the chickens I have
for barter - I need a portable token of exchange representing my chickens
- gubbments seems to be going to plastic check cards - more portable than
green iou's or gold for the tokens of exchange can literally be infinite
on the plastic electronic check card. The problem with token of exchange
is that it has to be trusted and POLICED. Visa and Mastercard have
really helped a lot of people get things they wanted - but this is short
sighted money - it has no built in controls like gold for when you are
overspending far beyond your ability to repay. I stuck a card with 20K -
they will never get it out of me - my business went broke - game over -
without that easy credit I never could have got that far down.

 and the state is the sole
> entity that is entitled to issue the money of the United States. This
> is not that hard to understand.

Ok. Right now our money is printed on machines that are made in
switzerland - there is no global police force policing those machines.

Right now visa and mastercard are issuing credit to people who are never
going to repay - they buy 200 dollar nikes and lots of applebees and get
up to 30K or more and then just walk away.

> If your choice (and I assume it is by your quoting von Mises) is to
> have all the money in the world tied to lumps of some mineral,

ACtually no - it seems all the gubbments are making a push to electronic
money - more portable than paper tokens - that is our global future - but
learn from history - some people are not as smart as me and you - and
pretty shiny metal makes sense in thier simpler world of lower IQ.
Concepts not represented by physical realities - physical tokens - just
don't make sense to them. A good US dollar or gold coin makes sense to
them - never forget the people from which you must feed from. Still visa
and mastercard and checkcards seem to really be prolifertaing in my city
- I am one of the few that still walk around with dollars in the malls I
think - those shopping machine women are lighting those credit cards up -
maybe I can appreciate smart hackers making the electronic money
dishonest better than dumber citizens or useless shopping machines
lighting up the credit cards that they will never be able to repay.

 then we
> would have the most restrictive monetary supply in the world.

When economies start collapsing people do things out of fear - jumping
into gold might be what they do. When people hear about hackers stealing
millions or bilions of thier electronic cash - they lose trust - and you
and I know what happens when people lose trust in a portable token - it
becomes unable to serve its purpose anymore - and uselessness is the
mother of death and destruction.

  We've
> tried that before, in all it's variations, and it didn't work.

When societies collapsed - gold seemed to be what the new gubbments
jumped back into - is mexico making thier money honest through silver?

You cant print more gold. Gold has a built in function of stopping
unchecked growth that you don't get with visa or checkcard. Gold stops
the hackers from electronically stealing billions. Now personally, my
WEALTH is going into MRE's because you cant EAT gold - and if things ever
get that violent - I want 20 chickens in my house instead of shiny metal
- its all relative. If switzerland will let me start policing thier
machines that make our currency - that is gonna be a good thing.

> An alternate option (the present option) is to have the bankers issue
> the money. In this system, all the money winds up benefitting the
> bankers. More logic.

If my chickens are in the bankers hen house and have 2 babies - the
bankers get that benefit - yes that is logical - all I have are the
tokens representing 2 chickens - dont want the bankers getting your
chicken babies - store your chickens yourself and carry them around when
you barter - not the tokens.

> The correct option is to have the state issue the money, based on

Go read the GAO reports about the secret service - there are other
threads here where I have provided all the links - we are not doing such
a jam up job protecting the honesty of the money - and that is what I
have found out in public - imagine how it really is behind closed doors -
but always put in your head - as long as they take it at mcdonalds dont
worry - with time the gubbment will get better at making it honest and
things will work out OK in the end - panic is your enemy - peace your
friend. I like paul krugman, but he is starting to panic people - a bad
thing. Gold bugs want to panic people, bad thing, but the state needs to
make our money honest - I opt for world policing of the money - something
we dont have now in a system of nation states - but I am hopeful the
smarties in charge are doing good things behind close doors until they
feel the public can chomp down on new ideas without panic. I think it
will be all ok - this free credit to idiot shopping machines will cease
and we will all go to electronic cash - exciting times we live in.

> things of lasting value. Things like highways, airports, water
> systems, etc,...in other words, things that make the economy work to
> it's maximum effectiveness. (If any doubt the validity of such a
> system, then just imagine an economy where there are no roads, no
> docks, no wharves, no airports, no sanitary systems, and so forth...)

Ok, the pueblo indians didn't have all that - I am told they were happy
people. Did Adam and Eve have that ***?

> In this option, the beneficiaries are the citizens. I'm for that.

I think we all want for the good of the people - how to get there without
panic and pain.

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