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: If you want to call it a ponzi scheme, fine, but it's a ponzi scheme that works and provides for the necessary amount of liquidity for a modern economy to run while paying back investors with an almost infantesimal risk of losing out.
And we are back to the same Keynesian assertion: That more money is better than less money. Please elaborate.
Try to not get sidetracked into a counterfactual history of the stability of banking systems.
Peace
Wilmot of Rochester: No, I'm plenty familiar with it, I just disagree with the bastardized version proposed by Rothbard. The Mises-Hayek theory is a synthesis from Mises' Theory of Money and Credit and Hayek's later works. Maybe Roger Garrison could explain it better,
No, I'm plenty familiar with it, I just disagree with the bastardized version proposed by Rothbard.
The Mises-Hayek theory is a synthesis from Mises' Theory of Money and Credit and Hayek's later works. Maybe Roger Garrison could explain it better,
Of course, the Mises-Hayek theory is founded on the belief that FRB allows for the creation of fiduciary media which presupposes an artificial suppression of the money/market rate of interest below the natural rate, causing massive booms, and inevitably, massive busts. Mises called for a 100% gold reserve, and explained, in detail, why the currency school and Wicksell got it wrong, or didn't go far enough. He also explained that the mechanincal view of quantity theory is wrong, and that an increase in the money supply by 50% doesn't mean an increase in inflation by 50%. Inflation could out-pace money growth, but it doesn't have to. Mises completely rejected "velocity of circulation" since it's no different than T, or transactions. Money is never exchanged for just money, banks don't do this, people don't do this, and firms don't do this. The commodity traded in capital markets is time, that is, current goods against future goods.
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"In analyzing the equation of exchange one assumes that one of its elements--total supply of money, volume of trade, velocity of circulation--changes, without asking how such changes occur. It is not recognized that changes in these magnitudes do not emerge in the Volkswirtschaft [political economy, or more loosely `economy'] as such, but in the individual actors' conditions, and that it is the interplay of the reactions of these actors that results in alterations of the price structure. The mathematical economists refuse to start from the various individuals' demand for and supply of money. They introduce instead the spurious notion of velocity of circulation fashioned according to the patterns of mechanics." (Human Action, p. 399)
"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: Hilarious you world propose a so called Mises-Hayek theory and then decry Mises's approach as "resetting the economy to ground zero;" a revealing phrase in itself. (revealing that you conflate the economy and the money supply, for example) You seem to have proposed a Keynes-Mises-Hayek theory, where in we deliberately create bubbles then attempt to save ourselves from them.
Hilarious you world propose a so called Mises-Hayek theory and then decry Mises's approach as "resetting the economy to ground zero;" a revealing phrase in itself. (revealing that you conflate the economy and the money supply, for example)
You seem to have proposed a Keynes-Mises-Hayek theory, where in we deliberately create bubbles then attempt to save ourselves from them.
You didn't read Roger Garrison, did you?
existence is elsewhere
JonBostwick: Wilmot of Rochester: If you want to call it a ponzi scheme, fine, but it's a ponzi scheme that works and provides for the necessary amount of liquidity for a modern economy to run while paying back investors with an almost infantesimal risk of losing out. And we are back to the same Keynesian assertion: That more money is better than less money. Please elaborate. Try to not get sidetracked into a counterfactual history of the stability of banking systems.
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?
Esuric: Of course, the Mises-Hayek theory is founded on the belief that FRB allows for the creation of fiduciary media
Of course, the Mises-Hayek theory is founded on the belief that FRB allows for the creation of fiduciary media
No. The Mises-Hayek theory is based on the idea that when money goes out of equilibrium, the economy fluctuates leading people to mismanage their funds. When the quantity of money increases past equilibrium, you get a boom that must be liquidated. When the quantity of money decreases past equilibrium, you get a dreaded cycle of depression. It's about equilibrium, not gold worship.
Esuric:Of course, the Mises-Hayek theory is founded on the belief that FRB allows for the creation of fiduciary media which presupposes an artificial suppression of the money/market rate of interest below the natural rate, causing massive booms, and inevitably, massive busts.
Fractional reserve banking allows the market rate of interest to equal the natural rate of interest thereby avoiding booms and busts.
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
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
A gold base money standard.
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."
*sound money*
scineram:Fractional reserve banking allows the market rate of interest to equal the natural rate of interest thereby avoiding booms and busts.
One quote from Mises/Hayek which would back this claim up.
Wilmot of Rochester:No. The Mises-Hayek theory is based on the idea that when money goes out of equilibrium, the economy fluctuates leading people to mismanage their funds. When the quantity of money increases past equilibrium, you get a boom that must be liquidated. When the quantity of money decreases past equilibrium, you get a dreaded cycle of depression. It's about equilibrium, not gold worship.
Way to ignore all of my points, once again.
That sounds non-sense. The market rate of interest is never equal to the natural rate of interest.
Juan:Despite all that some people here babble macroeconomic nonsense about 'equilibrium' and the wonderful efficiency of the banking mafia. Sickening.
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, that would be sickening - I am a supporter of a currency backed standard and I think that would be a dominant currency in a free market. I am only supporting libertarian principles by stating that a FRB could legaly (not efficiently) exist in a anarcho-capitalist society.
Juan:The dishonesty of some people here is staggering. For the record, free banking assumes 1) underlying commodity money 2) no regulations 3) courts that enforce property rights. Today we have 1) fiat money 2) total cartelization of the system through central banking 3) monopolistic provision of 'justice' - that is the courts are a mafia working for the state and against property rights. 4) wholly socialist 'deposit insurance' Despite all that some people here babble macroeconomic nonsense about 'equilibrium' and the wonderful efficiency of the banking mafia. Sickening.
So... Aside from us being apart of the mafia, insurance is socialism now? My goodness! That's why they changed the name to Blue Sickle, Blue Hammer.