Are you willing to 6 dollars for a gallon of gas!

**ghettopalmetto** · February-26-12, 11:41 PM

Relevant to any discussion on the gold standard. That is, if you're interested in facts.

So what does ail Europe? The truth is that the story is mostly monetary. By introducing a single currency without the institutions needed to make that currency work, Europe effectively reinvented the defects of the gold standard — defects that played a major role in causing and perpetuating the Great Depression.

More specifically, the creation of the euro fostered a false sense of security among private investors, unleashing huge, unsustainable flows of capital into nations all around Europe’s periphery. As a consequence of these inflows, costs and prices rose, manufacturing became uncompetitive, and nations that had roughly balanced trade in 1999 began running large trade deficits instead. Then the music stopped.

If the peripheral nations still had their own currencies, they could and would use devaluation to quickly restore competitiveness. But they don’t, which means that they are in for a long period of mass unemployment and slow, grinding deflation. Their debt crises are mainly a byproduct of this sad prospect, because depressed economies lead to budget deficits and deflation magnifies the burden of debt.

http://www.nytimes.com/2012/02/27/op...e.html?_r=1&hp

**oladub** · February-27-12, 01:51 AM

ghettopalmetto: When are you going to learn the difference between monetary policy [[printing money) and fiscal policy [[taxation and spending)? It's almost like you're trying to NOT learn anything.

Gp, Maybe I'm not explaining it properly. Printing fiat money, backed by nothing, is a way of paying down government debt but devalues the currency. It worked in Zimbabwe for awhile. It is a temporary substitute for taxation and acts as a hidden tax by skimming value off of currency. Let's say President Bush wanted to have a war but didn't want to anger all the taxpayers. Voila! Crank up the printing presses and all the bills get paid and no one gets angry. Note that you have printing under monetary policy and spending under fiscal policy. I don't make that distinction because they intertwine.

If States can't make anything but gold and silver coin a tender of debts and there are fifty states, what does that leave besides maybe individuals bartering? Show me the part authorizing fiat money?

Rb, You believe in things too like deficit spending, bombing Libyans without an act of Congress, the encroaching police and nanny state, using treaties to get around Congrss, printing fiat money, bank bailouts, and other things Obama. We just believe in different things.

**maxx** · February-27-12, 01:44 PM

Isn't it interesting that oil prices continue to rise while demand is low?

http://thinkprogress.org/economy/201...g-demand-1997/

Why do Reps. blame Obama's stalling of the Keystone pipeline when the real cause of high oil prices is something else?

**maxx** · February-27-12, 02:04 PM

http://www.forbes.com/sites/richdank...gold-standard/

Lehrman has some interesting points aside from returning to the gold standard.
"..., Lehrman also outlines banking reform which would insist that financial institutions reestablish their role as fiduciaries through improved liquidity standards using fair market valuation and quarterly stress tests..."

However I don't understand why he says this since we had deficit spending for decades starting with FDR.
"...The gold standard links the supply of money with its natural demand. It inflation-proofs the central bank and takes away the government’s usage of continual deficit financing..."

**maxx** · February-27-12, 02:08 PM

" as the WSJ notes, there isn't enough shiny stuff in the ground to accommodate the surge in demand from central banks, particularly in Asia, that such a shift would cause as nations adjusted their reserves."

http://www.cbsnews.com/8301-505123_1...gold-standard/

**ghettopalmetto** · February-27-12, 02:53 PM

Originally Posted by maxx

"...The gold standard links the supply of money with its natural demand. It inflation-proofs the central bank and takes away the government’s usage of continual deficit financing..."

I don't see how this is a positive. If you have a recession *ahem*, then how are you supposed to re-stimulate the economy? Magic? There is no causal relationship between fiscal austerity and economic demand, and Europe is sure-as-shit proving that true right now. The Confidence Fairy does not exist.

In a recession, inflation isn't a concern. A gold standard effectively eliminates any form of monetary policy, which is incredibly dangerous in times of both recession and inflationary expansion. The only positive attribute of a gold standard is that it boils everything down nice-and-simple for people who choose not to use their fucking brains.

**ghettopalmetto** · February-27-12, 03:14 PM

Originally Posted by oladub

Gp, Maybe I'm not explaining it properly. Printing fiat money, backed by nothing, is a way of paying down government debt but devalues the currency.

Printing fiat money "devalues the currency" with respect to what???

Did you ever think that perhaps, the Fed prints money to intentionally devalue money when necessary? And then, just maybe, the Fed buys back money to intentionally raise its value when necessary?

Sorry, man. You're never gonna be able to buy a loaf of bread for a nickel ever again, no matter how much you wish it.

**maxx** · February-27-12, 05:01 PM

Here's another problem:

Any country with investments in the United States could demand its gold at any moment. That's what happened in 1971. For years, the price of gold had been fixed at $35 an ounce. Finally, the British ambassador asked that $3 billion of the United Kingdom's investments be converted into gold. The United States soon went off the gold standard.

**Jimaz** · February-27-12, 06:56 PM

Uh oh. Here we go again. Received at 10 AM today from DetroitGasPrices.com:

Warning! Due to rising wholesale gasoline and rising oil prices, we believe a price hike is coming soon. We expect prices to rise to $3.75-$3.85 in Detroit any moment in the next 36 hours. We forecast the odds for this hike at 80%.

**oladub** · February-27-12, 09:00 PM

ghettopalmetto: Printing fiat money "devalues the currency" with respect to what???

Let's say there is a finite amount of flat land to build on around Santa Cruz, CA because the mountains are difficult to build on. The Fed decides to print money for whatever social purpose besides lining their owner bankers' pockets. This causes interest rates to go down so more people can afford to borrow. Instead of 300 parties with enough money to be able to buy one of the 250 houses the County allowed be built this year, suddenly there are 900 parties with enough money. The developers are smart enough to raise home prices 30% or whatever it takes so that only 250 parties are willing or able to buy homes. It is just an example of supply and demand. Given a static supply of something exposed to more demand, the prices go up

Did you ever think that perhaps, the Fed prints money to intentionally devalue money when necessary? And then, just maybe, the Fed buys back money to intentionally raise its value when necessary?

Yes, I think the fed intentionally devalues money so the government can pay it's bills. Taking back it's money is often more a theory than reality. The fed must not have acted quickly enough in 1921, 1920, the Nasdaq bubble, or the housing bubble.

Sorry, man. You're never gonna be able to buy a loaf of bread for a nickel ever again, no matter how much you wish it.

I agree. The question is if we can keep bread at it's present price.

**rb336** · February-27-12, 10:56 PM

Originally Posted by oladub

Let's say there is a finite amount of flat land to build on around Santa Cruz, CA because the mountains are difficult to build on. The Fed decides to print money for whatever social purpose besides lining their owner bankers' pockets. This causes interest rates to go down so more people can afford to borrow. Instead of 300 parties with enough money to be able to buy one of the 250 houses the County allowed be built this year, suddenly there are 900 parties with enough money. The developers are smart enough to raise home prices 30% or whatever it takes so that only 250 parties are willing or able to buy homes. It is just an example of supply and demand. Given a static supply of something exposed to more demand, the prices go up

That shows a mighty simplistic grasp of economics

**ghettopalmetto** · February-27-12, 11:16 PM

Originally Posted by oladub

Let's say there is a finite amount of flat land to build on around Santa Cruz, CA because the mountains are difficult to build on. The Fed decides to print money for whatever social purpose besides lining their owner bankers' pockets. This causes interest rates to go down so more people can afford to borrow. Instead of 300 parties with enough money to be able to buy one of the 250 houses the County allowed be built this year, suddenly there are 900 parties with enough money. The developers are smart enough to raise home prices 30% or whatever it takes so that only 250 parties are willing or able to buy homes. It is just an example of supply and demand. Given a static supply of something exposed to more demand, the prices go up.

So you agree that introduction of additional currency to the market can stimulate demand. What is your "static supply" during a period of recession?

And interest rates are still at historic lows [[The Fed rate remains at an effective ZERO). Where's the evidence of rampant inflation?

**rb336** · February-27-12, 11:40 PM

stop confusing them with facts.

**oladub** · February-28-12, 12:18 AM

Originally Posted by ghettopalmetto

So you agree that introduction of additional currency to the market can stimulate demand. What is your "static supply" during a period of recession?

And interest rates are still at historic lows [[The Fed rate remains at an effective ZERO). Where's the evidence of rampant inflation?

And heroin gives a nice buzz [[I'm told) but it's the hangover with interest that would bother me. That's for out kids to worry about.

The gasoline thread is evidence of inflation. So are prices at my food store, my property taxes, the cost of college tuition, and health insurance for starters. Metal T-posts I use for building fences have about doubled in six years and they are just a piece of steel. Also, Clinton modified the criteria for inflation so it would be officially higher if measured as it was in the past. At least the government doesn't have to hand out so much social security because of the changes.

**old guy** · February-28-12, 12:32 PM

Don't even get me started about the rising cost of corned beef this year. What's up with that? Speculation?

**ghettopalmetto** · February-28-12, 12:45 PM

Originally Posted by oladub

And heroin gives a nice buzz [[I'm told) but it's the hangover with interest that would bother me. That's for out kids to worry about.

Uh, what? Seriously. I have no idea what you're trying to say here. Our kids are responsible for monetary policy? I'm confused.

The gasoline thread is evidence of inflation. So are prices at my food store, my property taxes, the cost of college tuition, and health insurance for starters. Metal T-posts I use for building fences have about doubled in six years and they are just a piece of steel. Also, Clinton modified the criteria for inflation so it would be officially higher if measured as it was in the past. At least the government doesn't have to hand out so much social security because of the changes.

Quick--name the two sectors with the most volatile prices. If you guess "gasoline and food", you're correct!

A price increase for a single good does not necessarily mean "inflation". There can be a myriad of factors that lead to price increases. But you, MR. SUPPLY AND DEMAND, already knew that.

When a store has a sale, do you call that "deflation"? Just curious.

**ghettopalmetto** · February-28-12, 12:48 PM

I thought this was relevant to the thread:

Incompetent People Really Have No Clue, Studies Find

They're blind to own failings, others' skills

Erica Goode, New York Times
June 24, 2011

There are many incompetent people in the world. Dr. David A. Dunning is haunted by the fear that he might be one of them.

Dunning, a professor of psychology at Cornell, worries about this because, according to his research, most incompetent people do not know that they are incompetent. On the contrary. People who do things badly, Dunning has found in studies conducted with a graduate student, Justin Kruger, are usually supremely confident of their abilities -- more confident, in fact, than people who do things well.

Read more: http://www.sfgate.com/cgi-bin/articl...#ixzz1nhSRBvOP

**rb336** · February-28-12, 02:09 PM

Originally Posted by old guy

Don't even get me started about the rising cost of corned beef this year. What's up with that? Speculation?

A deli in NY is trying to corner the corned beef market

**bailey** · February-28-12, 02:20 PM

Originally Posted by rb336

A deli in NY is trying to corner the corned beef market

Its always the Jews.

/sarcasm

**maxx** · February-28-12, 04:13 PM

Returning to gas prices:
http://thedianerehmshow.org/shows/20...ing-gas-prices

**oladub** · February-29-12, 10:23 AM

ghettopalmetto: Uh, what? Seriously. I have no idea what you're trying to say here. Our kids are responsible for monetary policy? I'm confused.

I know. I was addressing the subject you brought up "introduction of additional currency to the market can stimulate demand " by making an analogy about the similarity of a crack buzz to Obama's economic stimulation. Yes there is a slight buzz from the stimulation but you fail to recognize the other side of the equation which is hangover in the case of crack and an economic hangover of debt which will have to be paid down by our kids. I don't think the buzz is worth it in either case and think it is immoral to dump this on our kids as a byproduct of Obamanomics.

Quick--name the two sectors with the most volatile prices. If you guess "gasoline and food", you're correct!

A price increase for a single good does not necessarily mean "inflation". There can be a myriad of factors that lead to price increases. But you, MR. SUPPLY AND DEMAND, already knew that.

I also mentioned a basic supply item," my property taxes, the cost of college tuition, and health insurance for starters." Now we're up to food, gasoline, taxes [[debts are deferred taxes), health care and education. Housing is about the only only thing offsetting my list and our Community Organize in Chief is scheming to make that more expensive to help out his banker buddies.Technically you are right about the definition of inflation. Inflation is more correctly the expansion of the money supply. It creates higher prices which we often refer to as inflation.

When a store has a sale, do you call that "deflation"? Just curious.

I call it normal and ongoing marketing. Clothing and furniture stores alway have sales. Various products go on sale when they are in oversupply or need to be cleared off of shelves or lots.

**ghettopalmetto** · February-29-12, 11:02 AM

Originally Posted by oladub

I know. I was addressing the subject you brought up "introduction of additional currency to the market can stimulate demand " by making an analogy about the similarity of a crack buzz to Obama's economic stimulation. Yes there is a slight buzz from the stimulation but you fail to recognize the other side of the equation which is hangover in the case of crack and an economic hangover of debt which will have to be paid down by our kids. I don't think the buzz is worth it in either case and think it is immoral to dump this on our kids as a byproduct of Obamanomics.

An increase in the monetary supply does not result in debt to the government. Let me repeat that: An increase in the monetary supply does not result in debt to the government.

Your fundamental misunderstanding of elementary concepts should tell you to get off the soapbox for a bit, and crack a book.

**oladub** · February-29-12, 12:00 PM

Originally Posted by ghettopalmetto

An increase in the monetary supply does not result in debt to the government. Let me repeat that: An increase in the monetary supply does not result in debt to the government.

Your fundamental misunderstanding of elementary concepts should tell you to get off the soapbox for a bit, and crack a book.

There is a hidden inflation tax benefitting government and other debtors paying down their debts which is paid by savers who lose part of the spending power of their dollars as they are diluted by printed money. That's what happened in Zimbabwe and the Weimar Republic and will happen here and is happening to a limited extent e.g. food, gasoline, health care costs, taxes, supplies, but not housing. Your fundamental misunderstanding suggests why our country is in a mess.

The federal government also borrows far more than it raises in revenue. That debt will have to be paid by our kids.

**maxx** · February-29-12, 03:54 PM

http://abcnews.go.com/blogs/business...-price-of-gas/

"...Chilton, who has served as commissioner since 2007, said far too few players control far too much of the market, allowing them to push the price of gas higher and higher. Chilton and the CFTC are attempting to implement caps on the total positions speculators can take when trading in the oil futures markets..."

The law was signed two years ago.
http://www.stopoilspeculationnow.com.../solution.aspx

**maxx** · February-29-12, 04:03 PM

http://www.nytimes.com/2011/09/25/bu...s-a-break.html
"...Congress told federal regulators to write rules that would ensure that Dodd-Frank does what it’s supposed to do, which includes protecting consumers. But the Commodity Futures Trading Commission has proposed rules that critics say might actually encourage speculation in the commodities markets, rather than reduce it. ..."