Quote from: Econ4Every1 on December 05, 2016, 02:53:06 PM
Yes, I didn't realize how small business are funded.

You, apparently don't know how currency comes into existence in the fiat based economy and are deflecting by bringing that up.

This is the fundamental disconnect in economics today, people don't understand how the system we have operates.

Right or wrong, good or bad, legitimate or illegitimate, you just don't know how the system we have operates.

Back before 1973 our economy was based on the gold standard, Nixon eliminated it and I made money off gold in the interim.
Now, and it's still a Fiat currency, but it's backed by absolutely nothing, it's only worth the value of the paper it's printed on.
So prior to 73, the govt was forced to back each and every dollar with an equivalent of gold in storage, this made the US economy strong and safe to invest in.
Look at silver and gold certificates from the early 60, states right on it, backed by metal, and can be exchanged at anytime for gold or silver bullion.
What we have today is an agreement that our currency is valuable, that is, as long as the world agrees to it's stated value.
Just imagine if the world decides to dump the dollar as a standard of trade.

Quote from: taxed on December 05, 2016, 02:58:42 PM
No, son, I've understood basic economics for decades.  Everybody knows about fiat currency.  It has absolutely nothing to do with your OP no matter how hard you want it to be.  You have made no argument except go into circles to where I'll get bored and drop off so you aren't challenged.  Mission accomplished.

Why insult me by calling me "son"?  I've been nothing but respectful and all of done is disagree.

I'm sure you have an excellent grasp of microeconomics and business, but if you can't explain how dollars are created in a fiat economy then you don't understand the foundation of macroeconomics as it's practiced today.

Taxed, Solar, Walkstall, anyone?  Can any of you explain it?

The reason you can't understand what I wrote in the OP is because you don't understand how money is created in a fiat economy.

Quote from: Econ4Every1 on December 05, 2016, 03:48:54 PM
Why insult me by calling me "son"?  I've been nothing but respectful and all of done is disagree.

I'm sure you have an excellent grasp of microeconomics and business, but if you can't explain how dollars are created in a fiat economy then you don't understand the foundation of macroeconomics as it's practiced today.

Taxed, Solar, Walkstall, anyone?  Can any of you explain it?

The reason you can't understand what I wrote in the OP is because you don't understand how money is created in a fiat economy.

I did in the post above yours. In a Fiat economy such as ours today, they do not create dollars simply by printing them, in fact when they do, every dollar in existence is devalued.
Really simple, let's assume I had the only two Kroglesnaps in existence (a rare and imaginary extinct wishing snake)
I sell you both for one billion dollars, you are happy with the deal, knowing you can set a sale price where the sky is the limit because you have a monopoly on the mkt.

Two years later you put them up for auction at ten times the price you purchased them for and you have bidders fighting over them. Wow, you'll make a killing.

Suddenly an unknown comes out of Russia with two previously unknown specimens, then another comes out of China and the price plummets.
Then a cave is discovered containing billions of them. What do you suppose happens to your precious two?

That's what happens every time the Fed devalues our currency by printing more and basing it on nothing.

Quote from: Solar on December 05, 2016, 03:26:30 PM
Back before 1973 our economy was based on the gold standard, Nixon eliminated it and I made money off gold in the interim.

Minor point, but Bretton Woods was agreed to in 1971.

Quote from: Solar on December 05, 2016, 03:26:30 PMNow, and it's still a Fiat currency, but it's backed by absolutely nothing, it's only worth the value of the paper it's printed on.

Its value is determined by what can be bought with it.  Don't confuse intrinsic value, with value.  I have tickets to this years Superbowl.  They are made of paper and by themselves have no intrinsic value, but as long as there is a Superbowl and my tickets will get me through the gate and into the seat I paid for, they have value.

The US dollars value will drop to zero when the US government can no longer enforce legal tender laws, it's tax system and it's monopoly on the issuance of US dollars.  It's also possible (but unlikely in the near future)that the dollars value could be lost if there is a massive loss in US productivity or massive over-creation of US dollars relative to the productivity that can be bought with it.

Quote from: Solar on December 05, 2016, 03:26:30 PMprior to 73, the govt was forced to back each and every dollar with an equivalent of gold in storage, this made the US economy strong and safe to invest in.

No disagreement.

Quote from: Solar on December 05, 2016, 03:26:30 PMLook at silver and gold certificates from the early 60, states right on it, backed by metal, and can be exchanged at anytime for gold or silver bullion.

Yes, I have several

Quote from: Solar on December 05, 2016, 03:26:30 PMWhat we have today is an agreement that our currency is valuable, that is, as long as the world agrees to it's stated value.

No, what we have is a monopoly enforced by the State and federal governments.  As long as the government has the power to tax and punish people for failing to pay those taxes, US dollars will have value to US citizens.  That is, unless you value your freedom less than your obligation to pay taxes.

Quote from: Solar on December 05, 2016, 03:26:30 PMJust imagine if the world decides to dump the dollar as a standard of trade.

And why would the world do that given the amount of productivity that is created because they accept the dollars to purchase their goods?

Quote from: walkstall on December 05, 2016, 02:48:23 PM
Just how old are you?   Do you save money?  Do you invest money if you save it?  Do you own a house, car, boat, RV, dish washer, Washing machine or Dryer?  IF so do you always go to the government for the lone.  There are a lot of us that don't use government money.  Government has not give me a damn thing.  All it has done is steal my money.

QuoteTaxed, Solar, Walkstall, anyone?  Can any of you explain it?

Econ4Every1, you have not answered even one of my questions.  Were they over your head? 

Quote from: Solar on December 05, 2016, 04:04:25 PM
I did in the post above yours.

There is nothing in there that explains how currency comes into existence.  Saying the Fed prints it is not an explanation. 

If you asked me to describe how an engine works and I said "you put the key in the ignition and turn it", I'm not really answering your question and neither did you.

Quote from: Solar on December 05, 2016, 04:04:25 PMIn a Fiat economy such as ours today, they do not create dollars simply by printing them, in fact when they do, every dollar in existence is devalued.

That's the econ 101 definition of inflation.  In reality, that's not how inflation works. 

Now to be clear were talking about "price inflation" as defined as a rise in the general price level.  Generally, the cause of inflation is when the demand for goods exceeds the supply such that prices on mandatory goods cause a rise in prices across the economy.  There are other non-supply factors that can cause inflation such as excessively high taxes or interest rates or the cost of something like land (which cannot be produced) is in short supply.

Thus, if money is created and there are spare labor and capital in the economy, businesses will hire more people and protect market share and look to benefit from economies of scale rather than simply raise prices.  Such is the benefit of a competitive capitalistic system as raising prices in an economy that can supply more labor and real resources will simply send your customers to your competition.

Now of course this assumes Ceteris paribus.  Something we have to assume to isolate other factors like value add's local markets advertizing etc...

Quote from: walkstall on December 05, 2016, 04:19:49 PM


Econ4Every1, you have not answered even one of my questions.  Were they over your head?

Deepest apologies....I'm trying to keep up.  There are 3-4 of you and only 1 me 

Quote1. Just how old are you?   2. Do you save money?  3., Do you invest money if you save it?  4. Do you own a house, car, boat, RV, dish washer, Washing machine or Dryer?  5. IF so do you always go to the government for the lone.  6. There are a lot of us that don't use government money.  7. Government has not give me a damn thing.  All it has done is steal my money.

1. Not sure what my age has to do with anything.

2. Sure

3. Yes

4. Yes, all of the above.

5. For some, not all.

6. What money do you use?

7. Did you go to public school?  Do you drive on the Highway?

8. I'll just say that taxes are definitely too high, but I don't want to put the cart before the horse.

Now I've answered all of your questions.

Can you explain how fiat currency enters the economy given the "new government" scenario I described several posts ago?

Quote from: Econ4Every1 on December 05, 2016, 04:08:54 PM
Minor point, but Bretton Woods was agreed to in 1971.

Irrelevant, it did not become law till Nixon signed it into law in 1974.

QuoteIts value is determined by what can be bought with it.  Don't confuse intrinsic value, with value.  I have tickets to this years Superbowl.  They are made of paper and by themselves have no intrinsic value, but as long as there is a Superbowl and my tickets will get me through the gate and into the seat I paid for, they have value.

It's called extrinsic, it's a social contract, one that can easily be broken, unlike one backed by metal.

QuoteThe US dollars value will drop to zero when the US government can no longer enforce legal tender laws, it's tax system and it's monopoly on the issuance of US dollars.  It's also possible (but unlikely in the near future)that the dollars value could be lost if there is a massive loss in US productivity or massive over-creation of US dollars relative to the productivity that can be bought with it.

No disagreement.

Yes, it's become a balancing act. One we need to stop and get under control and live within our means.

QuoteYes, I have several

No, what we have is a monopoly enforced by the State and federal governments.  As long as the government has the power to tax and punish people for failing to pay those taxes, US dollars will have value to US citizens.  That is, unless you value your freedom less than your obligation to pay taxes.

And why would the world do that given the amount of productivity that is created because they accept the dollars to purchase their goods?

Read Sun Tzu.

Quote from: Econ4Every1 on December 05, 2016, 03:48:54 PM
Why insult me by calling me "son"?  I've been nothing but respectful and all of done is disagree.

You are just starting out in economics.  I'm much older than you and have been studying Austrian economics when you were still learning to pee straight.

Quote
I'm sure you have an excellent grasp of microeconomics and business, but if you can't explain how dollars are created in a fiat economy then you don't understand the foundation of macroeconomics as it's practiced today.

If you don't understand the basics of currency then I can't help you.

Quote
Taxed, Solar, Walkstall, anyone?  Can any of you explain it?

We're still in awe that you think we can't have growth without debt.  You should fact-check your professor before parroting idiocy.

Quote
The reason you can't understand what I wrote in the OP is because you don't understand how money is created in a fiat economy.

Wrong.  You don't even know what you wrote.

Quote from: Econ4Every1 on December 05, 2016, 04:25:10 PM
There is nothing in there that explains how currency comes into existence.  Saying the Fed prints it is not an explanation. 

If you asked me to describe how an engine works and I said "you put the key in the ignition and turn it", I'm not really answering your question and neither did you.

Then why not explain your question better. I gave you a solid answer, it just didn't fit your agenda, or you'd have made your point in your reply.
Are you trying to tell me the Fed doesn't print Fiat currency?

QuoteThat's the econ 101 definition of inflation.  In reality, that's not how inflation works. 

Now to be clear were talking about "price inflation" as defined as a rise in the general price level.  Generally, the cause of inflation is when the demand for goods exceeds the supply such that prices on mandatory goods cause a rise in prices across the economy.  There are other non-supply factors that can cause inflation such as excessively high taxes or interest rates or the cost of something like land (which cannot be produced) is in short supply.

That's not inflation, that's appreciation. A better example of inflation would be what Carter did to the oil industry in the early 70s, resulting in inflation and killing our economy.

QuoteThus, if money is created and there are spare labor and capital in the economy, businesses will hire more people and protect market share and look to benefit from economies of scale rather than simply raise prices.  Such is the benefit of a competitive capitalistic system as raising prices in an economy that can supply more labor and real resources will simply send your customers to your competition.

Now of course this assumes Ceteris paribus.  Something we have to assume to isolate other factors like value add's local markets advertizing etc...

No, when you have unemployment exceeding demand, the market does not hire them because they're cheap. What you have is the beginning of a downturn in the economy, a natural cycle.
I'm going to guess you aren't American, right?

Quote from: Solar on December 05, 2016, 04:49:40 PM
Then why not explain your question better. I gave you a solid answer, it just didn't fit your agenda, or you'd have made your point in your reply.
Are you trying to tell me the Fed doesn't print Fiat currency?

That's not inflation, that's appreciation. A better example of inflation would be what Carter did to the oil industry in the early 70s, resulting in inflation and killing our economy.
No, when you have unemployment exceeding demand, the market does not hire them because they're cheap. What you have is the beginning of a downturn in the economy, a natural cycle.
I'm going to guess you aren't American, right?

I was going to say....  Canadian?

Quote from: Solar on December 05, 2016, 04:35:23 PM
1. Irrelevant, it did not become law till Nixon signed it into law in 1974.
2. It's called extrinsic, it's a social contract, one that can easily be broken, 3. unlike one backed by metal.
Yes, it's become a balancing act. One we need to stop and get under control and live within our means.
4.Read Sun Tzu.

1. I meant to say Bretton woods ended in 1971, but you understood. Yes, it was signed into law in 1974

2. Yes, I know what extrinsic means.

3. Currencies backed by metals have specific limitations, but before we plunge down that rabbit hole, I was hoping someone, anyone would tell me how new fiat dollars enter the economy.  Still no takers.

4.  This?

Quote from: Solar on December 05, 2016, 04:49:40 PM
Then why not explain your question better. I gave you a solid answer, it just didn't fit your agenda, or you'd have made your point in your reply.
1. Are you trying to tell me the Fed doesn't print Fiat currency?

2. That's not inflation, that's appreciation.  3. A better example of inflation would be what Carter did to the oil industry in the early 70s, resulting in inflation and killing our economy.
4. No, when you have unemployment exceeding demand, the market does not hire them because they're cheap. What you have is the beginning of a downturn in the economy, a natural cycle.
I'm going to guess you aren't American, right?

1. Yes, the Fed prints currency, but the Fed doesn't just print currency and deposit in the Treasuries account.  What happens before that?

2. No, here is where we agree to disagree as you tell me inflation is always a monetary phenomenon.  Then I tell you it's possible to have inflation without any money creation at all.  If let's say the Spanish Flu wiped out 1/2 of the population the value of money would decline as the output of the nation would fall. 

Holders of dollars would demand more than the economy could supply.  Money in circulation and productivity are two sides of the same coin.

3. Yes, there are different kinds of inflation, cost-push and demand-pull.  Ultimately both are supply disruptions.  One starts because people have more money to spend relative to the productivity that can be bought (need more supply) and the other is caused when a necessary good or service experience a supply disruption causing the price to increase and ultimately causing higher prices across the economy.  Again, more supply would solve the problem.

4. So during the holiday season, the perennial increase in employment is just my imagination?

Quote from: Econ4Every1 on December 05, 2016, 04:32:15 PM
Deepest apologies....I'm trying to keep up.  There are 3-4 of you and only 1 me 

1. Not sure what my age has to do with anything.

2. Sure

3. Yes

4. Yes, all of the above.

5. For some, not all.

6. What money do you use?

7. Did you go to public school?  Do you drive on the Highway?

8. I'll just say that taxes are definitely too high, but I don't want to put the cart before the horse.

Now I've answered all of your questions.

Can you explain how fiat currency enters the economy given the "new government" scenario I described several posts ago?

Quote1. Not sure what my age has to do with anything.

I did not think you would tell us.    

Quote

6. What money do you use?

I am not PC.  I use the money that I worked my ass for over 65+ years and invested it.  I also paid cash for every thing but a house, that the government did not finance.

Quote
7. Did you go to public school?  Do you drive on the Highway?

Yes and I paid state tax and the government stole money from me for the Highways.

Fiat currency is currency that a government has declared to be legal tender, but it is not backed by a physical commodity.  It's like all the IOU's in the locked SS box.  It's not worth the paper it printed on, it's like fool's gold.  The government keeps robbing Peter to pay Paul and Paul is getting pissed.  As the government does not have the money to pay Paul back, with out robbing more taxpayers and businesses.

Quote from: walkstall on December 05, 2016, 05:33:11 PM
1. I did not think you would tell us.     I am not PC.  2.I use the money that I worked my ass for over 65+ years and invested it.  3. I also paid cash for every thing but a house, that the government did not finance.
Yes and I paid state tax and the government stole money from me for the Highways.

4. Fiat currency is currency that a government has declared to be legal tender, but it is not backed by a physical commodity.  It's like all the IOU's in the locked SS box.  It's not worth the paper it printed on, it's like fool's gold.  The government keeps robbing Peter to pay Paul and Paul is getting pissed.  As the government does not have the money to pay Paul back, with out robbing more taxpayers and businesses.

1. I didn't say I wouldn't tell you, I just said I don't know what my age has to do with it.  My father served in the Marine Corps in Vietnam...  That should help.

2. News flash, that is the US dollar and that is government money.  Which is not to insinuate that you didn't earn it through your own hard work, just that the money in your pocket exists because the government or a bank that is part of the Federal Reserve System created it.

3. Paying cash is great, good for you!

4. Again, No one will tell me the process by which new dollars come into the economy so I can't address this statement as it will make little sense if you don't understand money creation....