[Mars]

Just because something is tried once and works terribly, does not mean that all variations of it will meet the same fate. All social systems are at least potentially unstable.

[Aardwolf]

I think you misread what he said. He didn't say "Marxism has been tried and it failed"; he said it hasn't been tried. Russia did it wrong.

[stinkyFeet]

I'm not very educated on economics, but a few things seem pretty obvious to me. Maybe I'm missing something, but here goes:

The only place the value of the dollar matters is at the interface where things are bought.  The dollar can be exchanged in large quantities for other things fairly easily in the stock market, even actual materials if you want to pay for storage. So, even if the value of the dollar fluctuates, if you have a handle on it, you beat inflation because the goods that would be bought with the dollar remain just as valuable.

My point is, all inflation does is make the interface where things are bought more difficult to deal with. When I go to the store, things will slowly rise in price and I have to factor that in. Every few years minimum wage will need to go up, or stay the same if they want it to be lower. It doesn't effect anything beyond that.

The biggest problem with this is that it travels in a way that suckers the poor out of money, it's a tax for being poor if you will.  When you have lots of money, the cost to manage that money in relation to the amount your managing is relatively low. You are always far away from that "interface" but if you don't have lots of money, you're focusing on making ends meet and can't go around on the futures market or what have you. So you put your money in a bank account, where it slowly increases in value but not beating inflation while everyone else who has money makes a profit of you.

That and pennies cost more to make than they're actually worth, or even do math with. Shopping at the store forces the cashier to spend time doing math that isn't worth the minimum wage they're paid.

[Bobboau]

actually it is a tax on people who hore money, if you don't have much in the bank and your job keeps your pay in pace with inflation the value of your goods will not decrese like the guy who has a billion in the bank and will be able to by a snickers bar with it in 10 years.

[Bob-san]

I'm not very educated on economics, but a few things seem pretty obvious to me. Maybe I'm missing something, but here goes:

The only place the value of the dollar matters is at the interface where things are bought.  The dollar can be exchanged in large quantities for other things fairly easily in the stock market, even actual materials if you want to pay for storage. So, even if the value of the dollar fluctuates, if you have a handle on it, you beat inflation because the goods that would be bought with the dollar remain just as valuable.

My point is, all inflation does is make the interface where things are bought more difficult to deal with. When I go to the store, things will slowly rise in price and I have to factor that in. Every few years minimum wage will need to go up, or stay the same if they want it to be lower. It doesn't effect anything beyond that.

The biggest problem with this is that it travels in a way that suckers the poor out of money, it's a tax for being poor if you will.  When you have lots of money, the cost to manage that money in relation to the amount your managing is relatively low. You are always far away from that "interface" but if you don't have lots of money, you're focusing on making ends meet and can't go around on the futures market or what have you. So you put your money in a bank account, where it slowly increases in value but not beating inflation while everyone else who has money makes a profit of you.

That and pennies cost more to make than they're actually worth, or even do math with. Shopping at the store forces the cashier to spend time doing math that isn't worth the minimum wage they're paid.

The stock market is a poor place to consider the value of the dollar. That's because all stock prices are highly speculated upon--the actual owners equity and the market capitalization are very different numbers. If my company has $100 in assets & $80 in liabilities, that means that owners' equity is $20. However, in order to consider selling my company, I'd want to recoup at least my initial investment--if I invested $50, that means I want at least $50 to walk away--$30 more than my actual interest. Imagine this times a few million--some companies have market capitalizations greater than $100B--in a pure system free of the effects of mass psychology, that stock price would reflect both today's book value (their current ratio) and tomorrow's potentials (their overall ratio and expectations placed upon new products).

[Nuke]

actually it is a tax on people who hore money, if you don't have much in the bank and your job keeps your pay in pace with inflation the value of your goods will not decrese like the guy who has a billion in the bank and will be able to by a snickers bar with it in 10 years.

observation: bob does not know how to spell whore.

[stinkyFeet]

actually it is a tax on people who hore money, if you don't have much in the bank and your job keeps your pay in pace with inflation the value of your goods will not decrese like the guy who has a billion in the bank and will be able to by a snickers bar with it in 10 years.

You're supposed to be getting paid more because you're getting better at your job. Anyway, my point doesn't rely on it, only that it was more thing you end up keeping track of.

I guess the stock market was a bad example. There's still the future's market, where you invest in actual goods, bonds, hedge funds or CDs, though to be honest I don't know that much about them.

I think that the point that we are not on the same page on is whether rich hoarders sit around with all their money invested in US dollars or in something else that would appreciate in value. I just assumed it was the latter, but I don't really know for sure.

[MP-Ryan]

and your job keeps your pay in pace with inflation

There isn't a middle-class job on Earth with pay that consistently keeps pace with inflation.  The only compensation packages that tend to deal with inflationary pressure (or provide sufficient compensation to make inflation essentially irrelevant) are in the top 5% of earners.

There are a few pension plans out there that are technically indexed (for the moment, mine is one of them), but the indexing is typically not based on cost of living and instead uses a national inflation statistic derived from central banks, which never accurately reflects real-world inflation.

It is true that monetary policy that encourages or allows inflation, such as those being pursued by the Fed and the Bank of Canada right now tend to be a tax on savers to the benefit of borrowers.  However, I think most people can agree that cranking interest rates up anytime soon is a spectacularly bad idea if we're aiming for economic recovery.

[Bobboau]

observation: bob does not know how to spell whore.

actually I was trying to spell "horde".

[Cyborg17]

I think that the point that we are not on the same page on is whether rich hoarders sit around with all their money invested in US dollars or in something else that would appreciate in value. I just assumed it was the latter, but I don't really know for sure.

Most of the very rich have their wealth in stocks of their own companies, like Bill Gates, Warren Buffet etc.  It'd be kind of awkward to have a bank account with 40 billion dollars just sitting there.....  Though, I wouldn't mind it.....

[BloodEagle]

observation: bob does not know how to spell whore.

actually I was trying to spell "horde" "hoard".

You people and your Worlds of Warcrafts.

[Mikes]

I think you misread what he said. He didn't say "Marxism has been tried and it failed"; he said it hasn't been tried. Russia did it wrong.

Central Planning is what brought the Soviet Union down.

Capitalism with un-/deregulated markets is bringing the United States down.


Communism and/or Democracy are only in so far to blame as they rely on those flawed economic systems.


What we really do need is a new, stable, humane and fair system for allocating goods and ressources.

The tragedy of our time is really that we are quickly approaching a point where there simply isn t enough "work"available for everyone anymore and instead of rejoicing and using all that available time productively we just can t handle it because we re still stuck in classic Capitalism and goods allocation is a matter of corporate arithmetics instead of common sense.

In a way you might argue we already have "AIs" in control that graze on humanitys wealth in order to survive... rather dumb AIs running programs cooked up by business economics theory and running on the completely inefficient and rather unreliable hardware that consists of a network of multiple humans. Once a corporation reaches a complexity that eludes a single humans control... what is it really? An entity that exists to survive and make profits, by any means necessary...  a symbiotic relationship with "customers" is nowadays often already optional. (See patent trolls for a particularily nasty corporate "lifeform".)

So how long before we can remove human decision making from the process? Or do we even still have to ask when on a smaller scale we are already seeing the first bot entrepreneurs on Amazon lol.

[Mr. Vega]

Bobboau, you need to look up Modern Monetary Theory right now and read about it. Especially anything written by L. Randall Wray.

[Mr. Vega]

Here we go:

http://www.economonitor.com/lrwray/2011/08/24/zimbabwe-weimer-republic-how-modern-money-theory-replies-to-hyperinflation-hyperventilators-part-1/