It would seem that using the printing press on currency always leads to trouble ( inflation, assault on savings ect ) , can you ever justify printing money?
Dustin S. Jussila: It would seem that using the printing press on currency always leads to trouble ( inflation, assault on savings ect ) , can you ever justify printing money?
No.
Abstract liberty, like other mere abstractions, is not to be found.
- Edmund Burke
Wilmot of Rochester:insurance is socialism now?
you think the FDIC is a free market scheme and not socialist?
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
JackSkylark:I do not agree with a lot of the posters supporting FRB, but I do not think it violates property rights or natural contract law.
Secondly, no one is supporting the banking mafia we have now,
I am only supporting libertarian principles by stating that a FRB could legaly (not efficiently) exist in a anarcho-capitalist society
February 17 - 1600 - Giordano Bruno is burnt alive by the catholic church. Aquinas : "much more reason is there for heretics, as soon as they are convicted of heresy, to be not only excommunicated but even put to death."
http://mises.org/journals/qjae/pdf/qjae8_2_4.pdf <---a personal fave of an article for me.
our dynamic dou strike again!
nirgrahamUK: JackSkylark:I do not agree with a lot of the posters supporting FRB, but I do not think it violates property rights or natural contract law. http://mises.org/journals/qjae/pdf/qjae8_2_4.pdf <---a personal fave of an article for me. our dynamic dou strike again!
I am reading the journal article right now. I have read most of Walter Blocks works on FRB and agree 100% on the economics - my only problem is with the way he sees the property transfer as more of a warehouse as opposed to a on demand loan.
I have a quick question. Would it be fraudulent on the part of the debtor for two people (one a debtor, the other a creditor) to engage in a redeemable on demand loan and then for the debtor to spend such that if the creditor were to ask for the money right then he would be unable to pay (thus breaching the contract), but at some miniscule time in the future would have the proper funds in order to pay? I guess the question happens to be: in a redeemable on demand loan would the debtor have to be able to pay back the loan at all times until the creditor calls in the loan?
JackSkylark: I have a quick question. Would it be fraudulent on the part of the debtor for two people (one a debtor, the other a creditor) to engage in a redeemable on demand loan and then for the debtor to spend such that if the creditor were to ask for the money right then he would be unable to pay (thus breaching the contract), but at some miniscule time in the future would have the proper funds in order to pay? I guess the question happens to be: in a redeemable on demand loan would the debtor have to be able to pay back the loan at all times until the creditor calls in the loan?
It's fraudulent; the debtor must be able to pay back the loan on demand, as the contract establishes.
nirgrahamUK: Wilmot of Rochester:Like my quote from Garrison alluded to. When the demand for money shifts, so should the supply of money so as not to have radical fluctuating prices based only on monetary fluctuations. It isn't about price stability, it's about trying to get money to be as close to neutral as possible. Like Mises and Hayek knew, inflation isn't good because it takes the economy out of equilibrium. Why would it be any different for deflation? garrison might be a free banker.... but he is still pro-gold ! http://www.auburn.edu/~garriro/g4gold.htm
Wilmot of Rochester:Like my quote from Garrison alluded to. When the demand for money shifts, so should the supply of money so as not to have radical fluctuating prices based only on monetary fluctuations. It isn't about price stability, it's about trying to get money to be as close to neutral as possible. Like Mises and Hayek knew, inflation isn't good because it takes the economy out of equilibrium. Why would it be any different for deflation?
garrison might be a free banker.... but he is still pro-gold !
http://www.auburn.edu/~garriro/g4gold.htm
And being pro-gold isn't necessarily a bad thing, as long as he understands that fractional resrve banking is necessary. That said, I think Garrison makes a few fundamental errors in his thinking here. One, he frames the debate into two camps, those that want central authority and fiat currency and those that one decentralized authority and gold currency. I, however, want decentralized authority with fiat currency. So where do I fit in? Also, he seems to characterize any other side that rejects the gold standard on the basis of liquidity expansion for the reason that we get it wrong in our terms of defining monetary stability. Well, maybe most economists think that constant price level = monetary stability, but I don't. I think a free market for currency where demand for money adjusts to supply = monetary stability.
To the FDIC comment. No, I wasn't referring to the FDIC. I was referring to the very concept of deposit insurance.
Imagine a corporation currency where the corporation controls the supply of money for banks as a private lender of last resort. This is a deposit insurance, but it's also free market.
existence is elsewhere
Wilmot of Rochester:One, he frames the debate into two camps, those that want central authority and fiat currency and those that one decentralized authority and gold currency. I, however, want decentralized authority with fiat currency.
Perhaps you misunderstand him? I don't know precisely what you're referring to, but "fiat", by definition, requires a central authority supporting and enforcing it.
That's not what you said even one page back. You gave up on creating bull markets through monetary expansion that quickly?
What is the purpose of this intellectual dishonesty?
Wilmot of Rochester:To do what? Well, to efficiently lend more than would otherwise be capable thus providing for long streams of growth and keeping the price of money stable.
Of course, you neglect that monetary fluctuations are the result of changes in the reserve rates banks. When excessively loose reserve policies lead to an increase in reserve levels and a contraction, your "solution" is to use even looser policies to prevent the correction from happening. How is that not Keynesianism?
Give me a break!
Peace
JonBostwick: That's not what you said even one page back. You gave up on creating bull markets through monetary expansion that quickly? What is the purpose of this intellectual dishonesty?
This guy doesn't know what he's talking about. He claims that Hayek wants "neutral money," or no deflation/inflation, aka "stabile prices." I think he's confusing Hayek with Friedman, and Mises with Fisher. Mises/Hayek don't care about rising/falling prices, they only want prices to adequately and accurately reflect the current economic condition, so that they act as real-time facts, market signals.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
JonBostwick: That's not what you said even one page back. You gave up on creating bull markets through monetary expansion that quickly? What is the purpose of this intellectual dishonesty? Of course, you neglect that monetary fluctuations are the result of changes in the reserve rates banks. When excessively loose reserve policies lead to an increase in reserve levels and a contraction, your "solution" is to use even looser policies to prevent the correction from happening. How is that not Keynesianism? Give me a break!
First, I don't know what you're talking about as far as being intellectually dishonest. I have maintained the same point and my allusion to the twenty year bull market the world has enjoyed was one showing that monetary policy, though not perfect and not fitting exactly what I describe as ideal, has gotten better and more sophisticated facilitating for quite a sharp period of growth. I'll take 20 years of prosperity over doing the exact opposite of what Hayek considered to be an ideal policy for dealing with recessions.
Second, no, what you describe is not only not my position, it's not really Keynesian either, it's more monetarist than anything.
Third, that isn't my policy proposal at all. My policy proposal is to let the correction happen - as Hayek understood - naturally and swiftly, but to keep the money supply constantly in toe with the demand for money.
Esuric: JonBostwick: That's not what you said even one page back. You gave up on creating bull markets through monetary expansion that quickly? What is the purpose of this intellectual dishonesty? This guy doesn't know what he's talking about. He claims that Hayek wants "neutral money," or no deflation/inflation, aka "stabile prices." I think he's confusing Hayek with Friedman, and Mises with Fisher. Mises/Hayek don't care about rising/falling prices, they only want prices to adequately and accurately reflect the current economic condition, so that they act as real-time facts, market signals.
Which doesn't happen without severe consequences unless the monetary system is in equilibrium.
Wilmot of Rochester:Which doesn't happen without severe consequences unless the monetary system is in equilibrium.
The "monetary system" is in equilibrium when interest rates are at their natural level, when the actual supply of differed consumption equals demand for investment, or at the rate at which capital goods are exchanged without money (meaning when the government/banks are not printing/deleting money). The economy is in equilibrium only when prices are allowed to reflect the current economic condition; meaning, no intervention/tampering. Re-read Hayek, Mises, and Rothbard. It's the Chicagoites who believe that the money supply must expand in order to keep price levels the same, or "stabile."
At first I thought you were just trolling... This might clear it up for you:
"I wish only to remind you of one further reason why it seems that, in the case of money, in contrast to any other good, the question of its value in general is of no consequence. We are interested in the prices of individual goods because these prices show us how far the demand for any particular good can be satisfied. To discover the causes why certain needs, and the needs of certain persons, can be satisfied to a greater degree than others is the ultimate object of economics. There is, however, no need for money in this sense--the absolute amount of money in existence is of no consequence to the well-being of mankind--and there is, therefore, no objective value of money in the sense in which we speak of the objective value of goods. What we are interested in is only how the relative values of goods as sources of income or as means of satisfaction of wants are affected by money....The problem is never to explain any "general value" of money but only how and when money influences the relative values of goods and under what conditions it leaves these relative values undisturbed, or, to use a happy phrase of Wicksell, when money remains neutral relatively to goods." (page 221 Prices and Production)
Again, the way he uses the term "neutral" is completely different than the way you're using it. He doesn't mean a stabile price level, he just means one which isn't disturbed by certain externalities (FRB). Where the value of money is solely determined by marginal utility, and nothing else (the rate of interest/money growth).
Esuric:This guy doesn't know what he's talking about. He claims that Hayek wants "neutral money," or no deflation/inflation, aka "stabile prices." I think he's confusing Hayek with Friedman, and Mises with Fisher.
Educate yourself before you talk nonsense.
Esuric:Mises/Hayek don't care about rising/falling prices, they only want prices to adequately and accurately reflect the current economic condition, so that they act as real-time facts, market signals.
Which is what free bankers do too.
Esuric:What we are interested in is only how the relative values of goods as sources of income or as means of satisfaction of wants are affected by money....The problem is never to explain any "general value" of money but only how and when money influences the relative values of goods and under what conditions it leaves these relative values undisturbed, or, to use a happy phrase of Wicksell, when money remains neutral relatively to goods." (page 221 Prices and Production)
No free banker disagrees with this as far as I know.