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Continuous inflation - increasing the money supply - doesn't generate true wealth, only more money. Over time, the increased quantity of money leads to a decrease in the purchasing power of money and corresponding increases in prices and wages. Inflation is in effect a windfall for the people who get the new money earlier, and a theft from those
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> Whats wrong with the manufacturing workers voluntarily joining a group and for that group and the manufacturer to voluntarily come to mutually satisfactory agreements without any governmental intervention? IMHO, there is absolutely nothing wrong with this. Likewise, it's also morally acceptable for the employer to fire all of the employees
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So, are you proposing a specific intervention to mitigate the transitional effects? Do you want to establish a tariff on the foreign goods, so that the price I have to pay for them increases? Or do you want to confiscate property to help subsidize domestic manufacturing? How can you calculate what opportunities are lost due to the artificially inflated
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A nation can be quite prosperous without manufacturing. Take, for example, the Vatican, which specializes in religious services. >The typical libertarian stance on freee trade is overly optimistic. Then what do you advocate? Unfree trade? You are certainly welcome to not purchase things from China, but why should I be denied free access to cheap
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Country B has subsidies for Product X. What should Country A's response be to the subsidies?[/ No response. Consumers in country A should continue to buy product X from whichever sources are cheapest. If this means getting product X from country B, where country B is footing part of the bill, then that's wonderful! Manufacturers of product X
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A fractional reserve bank's insolvency is revealed when there is a run on the bank. A "fractional insurer"'s insolvency is revealed when a sufficiently large disaster occurs. I don't see a difference. Basically, it's all about what level of risk a customer is willing to accept.
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I'm not sure I understand your example. If the current price for a TV set is $100, then probably no buyer could be found who would pay $1000 for the miser's TV. If the miser owned all TV's in existence, and no one else could produce one, then he could probably sell the first TV for a lot of money. But subsequent ones would drop in price