3 ms·

> It's never worked that way. Yes, it has. When the FDA was formed in 1906, it didn’t write memos to notify buyers about the state of the meat-packing industr

> It's never worked that way. Yes, it has. When the FDA was formed in 1906, it didn’t write memos to notify buyers about the state of the meat-packing industry, it banned them. When thalidomide was found to cause birth defects, it was banned. When the Federal Reserve Act was passed, the result was not just a letter written to customers of specific banks. It brought specific changes on how banks may legally operate.

WalterBright 3y ago
The purpose of the Fed was not to regulate banks, but to create a fiat money system instead of a gold reserve system. The purpose of a fiat money system is to enable the government to print money and spend it with wild abandon, resulting in endemic inflation, and has happened to every single fiat money system. The Fed and the government will never admit this, however, which is why they blame inflation on: 1. speculators 2. profiteers 3. wage-price spiral 4. cost push 5. demand pull 6. Putin 7. Arab cartels 8. oil companies and about anything else they can think of. Anything but the real reason.
- deleted 3y ago
  [deleted]
- anonymouskimmer 3y ago
  > The purpose of GP comment was writing about "the result" of, not "the purpose of".
- WalterBright 3y ago
  "As we have repeatedly emphasized, maintenance of the gold Standard means that the stock of money must be whatever is necessary to balance international payments. On the other hand, the real bills criterion sets no effective limit to the quantity of money." -- Monetary History of the United States, pg 191, Friedman Endemic inflation set in the next year.
  - bumby 3y ago
    Didn't Friedman also acknowledge that more recent monetary influences (1980 onward) deviate from the data he used to draw his conclusions in Monetary History of the United States? In other words, the statistics he used wouldn't necessarily draw the same conclusions today? In that context, his statement is fine as a historical study but may not be suitable to model current economics.
- WalterBright 3y ago
  One of the more astonishing pieces of propaganda coming from the Fed is the idea that 2% inflation is some sort of "good for the economy" thing. Astonishing in that people buy it hook, line and sinker. What it is is a 2% annual tax on the economy. Even worse, your illusory inflation "gains" on assets then get taxed, too. The only thing it is good for is the politicians.
  - Straw 3y ago
    Although I agree wholeheartedly with the economic logic, I have a couple of minor counterpoints: 1. Constant 2% inflation at least doesn't have the negative effects of unpredictable inflation, its just a 2% tax. 2. Certain prices appear to be slightly sticky in that they don't go down, for example, wages are almost never cut in nominal terms, for psychological/cultural reasons- people tend to quit if their wages get cut. Slight inflation allows these to slowly decrease without running into the asymmetric price stickiness behavior. What do you think?
    - WalterBright 3y ago
      I'm actually ok with a 2% inflation rate as a means of funding the government. I just wish the Fed and the government would be honest about it. I don't like losing all respect for the officials pushing the propaganda.

WalterBright 3y ago

The purpose of the Fed was not to regulate banks, but to create a fiat money system instead of a gold reserve system. The purpose of a fiat money system is to enable the government to print money and spend it with wild abandon, resulting in endemic inflation, and has happened to every single fiat money system. The Fed and the government will never admit this, however, which is why they blame inflation on: 1. speculators 2. profiteers 3. wage-price spiral 4. cost push 5. demand pull 6. Putin 7. Arab cartels 8. oil companies and about anything else they can think of. Anything but the real reason.

deleted 3y ago
[deleted]
anonymouskimmer 3y ago
> The purpose of GP comment was writing about "the result" of, not "the purpose of".
WalterBright 3y ago
"As we have repeatedly emphasized, maintenance of the gold Standard means that the stock of money must be whatever is necessary to balance international payments. On the other hand, the real bills criterion sets no effective limit to the quantity of money." -- Monetary History of the United States, pg 191, Friedman Endemic inflation set in the next year.
- bumby 3y ago
  Didn't Friedman also acknowledge that more recent monetary influences (1980 onward) deviate from the data he used to draw his conclusions in Monetary History of the United States? In other words, the statistics he used wouldn't necessarily draw the same conclusions today? In that context, his statement is fine as a historical study but may not be suitable to model current economics.
WalterBright 3y ago
One of the more astonishing pieces of propaganda coming from the Fed is the idea that 2% inflation is some sort of "good for the economy" thing. Astonishing in that people buy it hook, line and sinker. What it is is a 2% annual tax on the economy. Even worse, your illusory inflation "gains" on assets then get taxed, too. The only thing it is good for is the politicians.
- Straw 3y ago
  Although I agree wholeheartedly with the economic logic, I have a couple of minor counterpoints: 1. Constant 2% inflation at least doesn't have the negative effects of unpredictable inflation, its just a 2% tax. 2. Certain prices appear to be slightly sticky in that they don't go down, for example, wages are almost never cut in nominal terms, for psychological/cultural reasons- people tend to quit if their wages get cut. Slight inflation allows these to slowly decrease without running into the asymmetric price stickiness behavior. What do you think?
  - WalterBright 3y ago
    I'm actually ok with a 2% inflation rate as a means of funding the government. I just wish the Fed and the government would be honest about it. I don't like losing all respect for the officials pushing the propaganda.