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>This country is heading towards one of those cyberpunk endings where corporations own people. That was settled in 1971, when money itself ceased to exist as h

>This country is heading towards one of those cyberpunk endings where corporations own people. That was settled in 1971, when money itself ceased to exist as humans have generally known it for thousands of years, and was instead replaced with fuduciary credit. So long as this stands, anything, you can only buy something if you or someone else has gone into debt to aquire the money for it, and those dollars will eventually be removed from circulation when they make their way back to a private banking cartel, the federal reserve.

gruez 3y ago
For all intents and purposes, working for federal reserve notes and working for yellow lumps of metal (via federal reserve notes) is the same. Yellow lumps of metal can't provide you with food or shelter, so you'd have to exchange it with someone else that has those things. There's no difference between the two aside from the fact that federal reserve notes can be printed at will in response to economic conditions, and yellow lumps of metal are extracted from the ground at haphazard rates.
- claytongulick 3y ago
  > aside from the fact that federal reserve notes can be printed at will in response to economic conditions, and yellow lumps of metal are extracted from the ground at haphazard rates. That's a pretty key difference. The value is based on scarcity. When there's no scarcity constraint, we can all just collectively vote ourselves to be billionaires. What could go wrong?
  - renewedrebecca 3y ago
    And yet, after all this time, we haven't voted ourselves to be billionaires.
  - gruez 3y ago
    >What could go wrong? I could say the same for basing your money supply on the production of a yellow metal. What happens when there's a massive discovery of gold? Or there's a (trade) war between the top producers (eg. china, australia, and russia)? Or when there's a worldwide pandemic and you need to provide stimulus so the economy doesn't collapse?
    - logicchains 3y ago
      >What happens when there's a massive discovery of gold? Or there's a (trade) war between the top producers (eg. china, australia, and russia)? Never in history has this situation caused a collapse like the hyperinflation seen in Weimar Germany or recently Zimbabwe. Because even a huge change in supply is only going to affect price by a double digit percent (check a chart of historical gold price volatility), while hyperinflation can reduce the value of currency by orders of magnitude. >Or when there's a worldwide pandemic and you need to provide stimulus so the economy doesn't collapse? The stimulus was only necessary because of the lockdowns, which in hindsight proved completely counter-productive, empirically producing no overall reduction in deaths (https://onlinelibrary.wiley.com/doi/full/10.1002/hec.4737 https://onlinelibrary.wiley.com/doi/full/10.1002/hec.4737 ). Without the ability to print money governments wouldn't have been able to get away with locking down their citizens so long, and the damage they inflicted on mental health and children's educational outcomes could have been reduced.
      - gruez 3y ago
        >The stimulus was only necessary because of the lockdowns The question of whether lockdowns were justified aside, pandemics aren't the only form of economic calamity that might occur. Financial crisis occur. Other supply shocks (eg. war in ukranie) exist as well.
        logicchains 3y ago
        And printing money isn't the only way to deal with supply shocks; a government could also use its reserves, as e.g. Singapore did during covid.
        gruez 3y ago
        1. Singapore is a city state that has a GDP around twice of other developed economies. What works for it does not necessarily work for every other country. 2. There's opportunity costs with keeping such high reserves around, rather than doing something productive like investing in infrastructure. 3. It's unclear how introducing massive amounts of gold (previously held in reserve) into the economy won't cause inflationary effects. Like I said earlier, you can't eat gold. Dumping a bunch of gold into the economy doesn't magically increase the amount of goods in existence, which would also lead to inflation that money printing would cause.
- logicchains 3y ago
  >For all intents and purposes, working for federal reserve notes and working for yellow lumps of metal (via federal reserve notes) is the same It's absolutely not because with federal reserve notes 2-3% of your purchasing power (more recently) is transferred every year to the elites in the financial system. Because the Federal Reserve doesn't just deposit money evenly into everybody's bank accounts, it loans it out to banks, and banks as the first recipients of the newly created money benefit from a wealth transfer from the last recipients of the newly created money (termed the Cantillon effect).
  - gruez 3y ago
    It's a leap to go from "Cantillon effect" to "2-3% of your purchasing power (more recently) is transferred every year to the elites in the financial system". I agree there's some benefit from getting the money sooner, but it's nowhere close to 100% of inflation.
    - logicchains 3y ago
      Yes you are right, a lot of that 2-3% goes to the government, and only the remaining part goes to elites in the financial system. It's still higher though than the 0% it'd be with gold-based money (or a Fed that helicopter-dropped money directly into people's bank accounts).
      - gruez 3y ago
        >Yes you are right, a lot of that 2-3% goes to the government I'm not really sure how that's the case when inflation expectations are baked into any sort of fixed income products.
        logicchains 3y ago
        >I'm not really sure how that's the case when inflation expectations are baked into any sort of fixed income products. The poorest people in the US, lower and lower-middle class, aren't holding many fixed-income products, and they're the ones hit hardest by inflation. But that aside, even if your fixed-income product covers inflation, you're still taxed on the capital gains as if it was real profit, because capital gains taxes (at least in the US) don't account for inflation. I.e. they tax the nominal gain, not the real gain.
- Geisterde 3y ago
  The bailouts of 2008 led to a k shaped recovery just like the bailouts and stimulus of covid. People save money when times are hard, interest rates rise and unproductive ventures collapse, that is the homeostatic response of the economy and it is a healthy one; when productive ventures prove themselves, they are able to attract the investment of savers and use it to aquire capital goods etc. When you print money in an attempt to stimulate the economy, you are sending mixed signals to investors who now have to worry about inflation eating their savings, ecouraging them to spend or invest in often unproductive ventures. This response drives up the cost of consumer goods and allows those unproductive ventures to suck up the capital goods that would be better used elsewhere.
  - gruez 3y ago
    The alternative of "economy goes bad -> people try to save money -> supply dries up -> economy goes even worse", as we saw in the great depression isn't great either.
    - logicchains 3y ago
      The great depression wasn't caused by just people saving money. The US imposed massive trade tariffs prior to it, which as predicted by basic macroeconomics had a big negative impact. It also added price controls, even on labour, which again as predicted by basic econ prevented the market from clearing and led to mass unemployment (as deflation was happening, price floors prevented wages from following it, so in real terms wages were too high for employers to afford, causing mass unemployment). Those price controls BTW are why health insurance is tied to employers in the US: because companies at the time couldn't offer higher wages above the price ceiling, so instead compensated by offering benefits like insurance instead.
    - Geisterde 3y ago
      The federal reserve admitted that their policies prolonged the great depression. People will buy the things that they need, resources will follow those needs because thats what people are actually buying. Some things might die, that is a reflection of society not actually caring very much about it, otherwise they would be buying it. This is in fact an attempt to re-organize the economy around specific things that wouldnt otherwise be supported by the market, with some crumbs left to curate votes. When people save, interest rates go up, freeing the capital goods needed for ventures that the market actually has a revealed preference for.

gruez 3y ago

For all intents and purposes, working for federal reserve notes and working for yellow lumps of metal (via federal reserve notes) is the same. Yellow lumps of metal can't provide you with food or shelter, so you'd have to exchange it with someone else that has those things. There's no difference between the two aside from the fact that federal reserve notes can be printed at will in response to economic conditions, and yellow lumps of metal are extracted from the ground at haphazard rates.

claytongulick 3y ago
> aside from the fact that federal reserve notes can be printed at will in response to economic conditions, and yellow lumps of metal are extracted from the ground at haphazard rates. That's a pretty key difference. The value is based on scarcity. When there's no scarcity constraint, we can all just collectively vote ourselves to be billionaires. What could go wrong?
- renewedrebecca 3y ago
  And yet, after all this time, we haven't voted ourselves to be billionaires.
- gruez 3y ago
  >What could go wrong? I could say the same for basing your money supply on the production of a yellow metal. What happens when there's a massive discovery of gold? Or there's a (trade) war between the top producers (eg. china, australia, and russia)? Or when there's a worldwide pandemic and you need to provide stimulus so the economy doesn't collapse?
  - logicchains 3y ago
    >What happens when there's a massive discovery of gold? Or there's a (trade) war between the top producers (eg. china, australia, and russia)? Never in history has this situation caused a collapse like the hyperinflation seen in Weimar Germany or recently Zimbabwe. Because even a huge change in supply is only going to affect price by a double digit percent (check a chart of historical gold price volatility), while hyperinflation can reduce the value of currency by orders of magnitude. >Or when there's a worldwide pandemic and you need to provide stimulus so the economy doesn't collapse? The stimulus was only necessary because of the lockdowns, which in hindsight proved completely counter-productive, empirically producing no overall reduction in deaths (https://onlinelibrary.wiley.com/doi/full/10.1002/hec.4737 https://onlinelibrary.wiley.com/doi/full/10.1002/hec.4737 ). Without the ability to print money governments wouldn't have been able to get away with locking down their citizens so long, and the damage they inflicted on mental health and children's educational outcomes could have been reduced.
    - gruez 3y ago
      >The stimulus was only necessary because of the lockdowns The question of whether lockdowns were justified aside, pandemics aren't the only form of economic calamity that might occur. Financial crisis occur. Other supply shocks (eg. war in ukranie) exist as well.
      - logicchains 3y ago
        And printing money isn't the only way to deal with supply shocks; a government could also use its reserves, as e.g. Singapore did during covid.
        gruez 3y ago
        1. Singapore is a city state that has a GDP around twice of other developed economies. What works for it does not necessarily work for every other country. 2. There's opportunity costs with keeping such high reserves around, rather than doing something productive like investing in infrastructure. 3. It's unclear how introducing massive amounts of gold (previously held in reserve) into the economy won't cause inflationary effects. Like I said earlier, you can't eat gold. Dumping a bunch of gold into the economy doesn't magically increase the amount of goods in existence, which would also lead to inflation that money printing would cause.
logicchains 3y ago
>For all intents and purposes, working for federal reserve notes and working for yellow lumps of metal (via federal reserve notes) is the same It's absolutely not because with federal reserve notes 2-3% of your purchasing power (more recently) is transferred every year to the elites in the financial system. Because the Federal Reserve doesn't just deposit money evenly into everybody's bank accounts, it loans it out to banks, and banks as the first recipients of the newly created money benefit from a wealth transfer from the last recipients of the newly created money (termed the Cantillon effect).
- gruez 3y ago
  It's a leap to go from "Cantillon effect" to "2-3% of your purchasing power (more recently) is transferred every year to the elites in the financial system". I agree there's some benefit from getting the money sooner, but it's nowhere close to 100% of inflation.
  - logicchains 3y ago
    Yes you are right, a lot of that 2-3% goes to the government, and only the remaining part goes to elites in the financial system. It's still higher though than the 0% it'd be with gold-based money (or a Fed that helicopter-dropped money directly into people's bank accounts).
    - gruez 3y ago
      >Yes you are right, a lot of that 2-3% goes to the government I'm not really sure how that's the case when inflation expectations are baked into any sort of fixed income products.
      - logicchains 3y ago
        >I'm not really sure how that's the case when inflation expectations are baked into any sort of fixed income products. The poorest people in the US, lower and lower-middle class, aren't holding many fixed-income products, and they're the ones hit hardest by inflation. But that aside, even if your fixed-income product covers inflation, you're still taxed on the capital gains as if it was real profit, because capital gains taxes (at least in the US) don't account for inflation. I.e. they tax the nominal gain, not the real gain.
Geisterde 3y ago
The bailouts of 2008 led to a k shaped recovery just like the bailouts and stimulus of covid. People save money when times are hard, interest rates rise and unproductive ventures collapse, that is the homeostatic response of the economy and it is a healthy one; when productive ventures prove themselves, they are able to attract the investment of savers and use it to aquire capital goods etc. When you print money in an attempt to stimulate the economy, you are sending mixed signals to investors who now have to worry about inflation eating their savings, ecouraging them to spend or invest in often unproductive ventures. This response drives up the cost of consumer goods and allows those unproductive ventures to suck up the capital goods that would be better used elsewhere.
- gruez 3y ago
  The alternative of "economy goes bad -> people try to save money -> supply dries up -> economy goes even worse", as we saw in the great depression isn't great either.
  - logicchains 3y ago
    The great depression wasn't caused by just people saving money. The US imposed massive trade tariffs prior to it, which as predicted by basic macroeconomics had a big negative impact. It also added price controls, even on labour, which again as predicted by basic econ prevented the market from clearing and led to mass unemployment (as deflation was happening, price floors prevented wages from following it, so in real terms wages were too high for employers to afford, causing mass unemployment). Those price controls BTW are why health insurance is tied to employers in the US: because companies at the time couldn't offer higher wages above the price ceiling, so instead compensated by offering benefits like insurance instead.
  - Geisterde 3y ago
    The federal reserve admitted that their policies prolonged the great depression. People will buy the things that they need, resources will follow those needs because thats what people are actually buying. Some things might die, that is a reflection of society not actually caring very much about it, otherwise they would be buying it. This is in fact an attempt to re-organize the economy around specific things that wouldnt otherwise be supported by the market, with some crumbs left to curate votes. When people save, interest rates go up, freeing the capital goods needed for ventures that the market actually has a revealed preference for.