patches70 wrote:I'm a gonna try one more time, Player. If you don't get, well, you don't get it.
you talk about the rising cost of things, but everything has gotten cheap, a lot cheaper. Technology, mass production, more efficient ways of doing things has driven the price of everything down to the cheapest things have ever been in the history of mankind.
You can see this by simply valuing things with something other than fiat dollars. You can use gold, commodities, silver, beans, coal, oil, doesn't matter, comparing from what once was to today and you'll see how much cheaper everything really is.
For instance, a loaf of bread cost 35 cents in 1970. Today, at least two bucks. In 1970 you could have bought almost three loaves of bread for a dollar. Today, you can't even get a half a loaf for a dollar. You think bread has gotten more expensive?
In 1970 an ounce of gold would have bought you 100 loaves of bread. Today, that same ounce of gold would buy you over 800 loaves of bread. The bread is demonstrably shown to be cheaper.
You don't have to use gold or just look at bread. Go by the price of oil, price of beans, tin, copper, anything and compare to just about anything and you'd see, everything is cheaper.
Oil is not cheaper, nor is water. Water is about to get much, much more expensive. Oil will likely maintain its relative low price for a while, becuase its artificially propped down.
Most other things have gotten superficially cheaper, but in many cases that isn't a bargain. The quality is much poorer and production has harmful impacts that are simply discounted.
patches70 wrote:It's not that our goods and services have gotten more expensive, it's that the medium we are using to exchange those goods is getting less and less valuable. This trend has increased quickly since 1970 where as before that, while our currency was actually pegged to something other than a promise from Uncle Sam, it's value remained much more stable for a very long time.
Nice theory, have heard it before.
The biggest trouble is you ignore the fact that real value doesn’t actually come from Gold. It comes from products that people make and buy. Gold is a universally understood value mechanism, but returning to the gold standard is hardly a panacea. There actually were a couple of threads on that here, even.
patches70 wrote:You think inflation is just a natural thing?
It’s ultimately a factor/result of growth.
patches70 wrote:Demand inflation (or I suppose Cost-Push if you are Keynsian) is more or less natural, no matter what type of currency one would use, when there is scarcity there is increased cost. This of course gives incentive to produce more of what is scarce. Which is a good thing, we get better and more efficient, we conserve more and we are encouraged to search for alternatives.
Except, you just assume there are alternatives and the above mechanisms are actually working. Today, the oil/gas and coal industries have skewed the system very heavily to that any other source of energy is nothing close to competitive. Also, there are some real technological issues. Any ideas to exchange oil for other substances or methods of energy expenditure are all just pipe dreams at this point or represent something as bad or worse than oil in regards to environmental costs.
Water is far worse. The fact is we are essentially “mining” groundwater and few are even paying attention to that fact. Not paying attention to a problem is not a great way to find solutions.
But the inflation I am demonstrating isn't demand inflation. It's currency devaluation and it isn't natural, it's engineered.
Here is the value of the dollar over time-
Now lets look at global inflation
The reason that families can't afford the things on one income like they used to pre 1970's is because it is government policy to inflate our debts away (and the Fed is more than willing to carry out the policy). It is because we are in debt that 80% of your community can't afford food, even though the true cost of food has dramatically decreased. Food is cheaper and more plentiful than it has ever been in the history of mankind. Yet, more and more people cannot afford things without more and more help. How is this possible?
This I don’t disagree with at all, though I probably disagree with your timeline and how it happened. I blame Reagan for the bulk, for the pieces that mean average people are paying for the damage while those near the top are grossing more in their pockets than ever.
Most people really don’t care about all that. They want to go out to their job, work hard, take home a paycheck that meets their needs and, if they are lucky, goes a bit beyond for a simple vacation, a few small luxuries like eating out once in a while or going to the amusement park or a show occasionally. They want to know that if they work hard for most of their lives, for what used to be 20-30 years and now is more like 40-50 years, they can then retire in decent condition, though nothing close to luxury. THAT is what has been lost by the prior administrations policies… and not fixed by Obama, with the slight exception of some of the healthcare law provisions (not the entire act, though it is better than what we had before).
patches70 wrote:Which only worsens the problem as more and more currency is created thus devaluing the currency already in circulation until the point we'll all be poor.
And it's all from the currency itself, not the actual costs of the things we are buying. Those costs are cheaper than ever.
Those who understand how this works are in a position to make the proper choices and benefit. Those who haven't got a clue only suffer more and more. Those who run the system keep the clueless pointing fingers at everything else except for the one thing that really matters.
The value of the currency in which all these transactions are processed. The underlying foundation of it all.
You just gave a very good explanation of why currency is not the underlying foundation of it all.
For individuals, gold is certainly an excellent investment, provided you have the means and ability to hold onto it. More than you can hold/carry is of little value except as another investment.
However, countries operate on a different scale, have for some time. I am not opposed to the gold standard, but basically, my understanding is that there just is not enough gold to do the job any longer.
patches70 wrote:You ignore that and so do too many people.
Why has the dollar lost so much value? It's monetary inflation-
That's the monetary base. Look at that spike. That's the money supply, and that's why food costs so much. It's not because there is a shortage of bread, it's because we keep pumping out more and more dollars.
And thus is one of the downsides to Fractional Reserve monetary systems.
This is all very predictable and by ignoring this we'll never solve any of our problems because this
problem is the root of it all.
That system is what everything else is built on. There isn't a monetary system in the world except for a very tiny amount of exceptions, that this type of system is in place.
Raise the minimum wage, raise the monetary base. It's a vicious cycle that keeps feeding on itself. And it's not just the minimum wage, plenty of other factors are involved as well.
And the sad part is, the only way out is so painful that no one has the fortitude to go through with it. Eventually it'll all collapse, that is inevitable. Until then though, we just extend and pretend. And that's what you're doing, Player, pretending like everyone else.
OK, your argument would be valid if I were saying that raising the minimum wage were the fix or that it should happen in isolation. I am saying that for right now, immediately, we need to make sure that at the very least, people who are working can at least support themselves without relying upon tax dollars. That stops one source of “bleeding out”, albeit not a huge bleed.
The biggest bleed involves not allowing so much profit to just migrate up, leaving the rest of us to pay for the messes made in the process. Build a big factory, run it to the ground, then leave it for the city to deal with .. maybe a generation down the road or maybe just a few years down the road. Consequences? You get to be a millionaire, though you may take some hits here and there. You never paid taxes, the people who’s land was condemned to make way for your factor are long gone and even if they were not, the land cannot be restored to farmland once its held a factory (not without a LOT of money and effort, if even then).
Or, look at the damage of that whole securitized loan debacle.. and notice how many (few, that is… try 0 ) decision makers in that wound up getting punished at all? Who is paying? People who got mortgages with good intentions, some who probably should not have had the mortgages, some who were legitimately qualified, but had downturns and some who were and still are or should be in good shape, except that the bank has changed the rules on them. All of them got “taken” by the banks, as did we taxpayers when we were forced to bail them out.
Before that, it was energy, before that it was the S & L crisis… before that, well then we have Reagan and his nice trick of taking the social security trust and using it as his handy cash fund to balance the budget.
Even so, none of that matters if we don’t have clean, readily accessible clean water and some kind of cheap fuel. It doesn’t matter if enough people in the world lack food and see America as the target, the one to blame. It doesn’t matter if changing climate means whole areas are under water, storms keep getting more and more severe. Any one of those things will impact the economy far more than being on or off the gold standard.