The Financial System and Money Supply

Nicole Collins13 said:Perspective has nothing to do with it.

Well, if you're certain about that, who am I to argue with your expertise . . .

neonhound10 said:Well, if you're certain about that, who am I to argue with your expertise . . .

It doesn't matter whose opinion it is. What matters is whether it's true or not.

Nicole Collins13 said:It doesn't matter whose opinion it is. What matters is whether it's true or not.

That’s just so hard to prove—honestly, it feels almost impossible to truly demonstrate...

neonhound10 said:That’s just so hard to prove—honestly, it feels almost impossible to truly demonstrate...

Look, people "stopping" their spending isn't some big scary monster. Even if they decide to stuff cash under a mattress, bury it in the backyard, or just burn it—whatever. Honestly, who cares? You're still alive. But fine, just like the supply side got wrecked back in the late 70s, the demand side will eventually go down the drain too. We'll all be going down with them. It’s basic logic. There are plenty of statistical miracles and historical precedents for this; if you don't see it, you've got a problem. I'm not going to waste my time correcting broken Mississippis, though. I'll leave the sandcastle to Nostradamus for his main broadcast. 😁

It’s honestly pretty interesting how these massive economies decide to just hand out subsidies to citizens, mostly just to keep the wheels of consumer spending turning...

To me, it feels a bit nonsensical to keep churning out goods when there isn't actually anyone lined up to buy them.

But I suppose some folks here are looking at this strictly through a textbook economic lens...😬

neonhound10 said:It’s honestly pretty interesting how these massive economies decide to just hand out subsidies to citizens, mostly just to keep the wheels of consumer spending turning...

To me, it feels a bit nonsensical to keep churning out goods when there isn't actually anyone lined up to buy them.

But I suppose some folks here are looking at this strictly through a textbook economic lens...😬

What you just wrote feels more like an argumentum ad baculum or maybe argumentum ad populum. I know you can do better than that.

To me, it doesn't make sense to produce something if there isn't a buyer for it.

Doesn't make sense to me either. So why does the government work so hard to stimulate consumption?

But I guess some people here are looking at this strictly through an economic lens. 😬

Give it a shot yourself. It isn't that hard. 😉

Nicole Collins13 said:What you just wrote feels more like an argumentum ad baculum or maybe argumentum ad populum. I know you can do better than that.

To me, it doesn't make sense to produce something if there isn't a buyer for it.

Doesn't make sense to me either. So why does the government work so hard to stimulate consumption?

But I guess some people here are looking at this strictly through an economic lens. 😬

Give it a shot yourself. It isn't that hard. 😉

🙂

That's an interesting way to look at it, but there are definitely others out there who feel the exact same way...😉

http://www.nytimes.com/why-the-fed-is-wrong-about-inflation

😉

neonhound10 said:🙂

That's an interesting way to look at it, but there are definitely others out there who feel the exact same way...😉

http://www.nytimes.com/why-the-fed-is-wrong-about-inflation

😉

I had to laugh reading this. Thanks for the link. 🤣 Honestly, at first I thought Nostradamus was just some crackpot, but compared to people like this, he’s basically Color TV. 🤣 Then again, coming from a guy with a PhD in Marxist theory who ran the USDA, built a competitive socialist agricultural system, and spends his time "planning long-term growth," you’d think he’d realize that when you push Keynesian doctrine on a small, open economy, those fiscal stimulus packages are really just subsidies for foreign companies. But hey, let them celebrate. Of course, the actual solution remains invisible.
You're spot on, man. 👍

Good grief... As if being an academic and holding a PhD wasn't enough already... 🤣
Economics, without a doubt—if you ask me. 😁

Andrew Booth29 said:Good grief... As if being an academic and holding a PhD wasn't enough already... 🤣
Economics, without a doubt—if you ask me. 😁

He wrote "Economic Crises in Marxist Theory" back in 1964. I'd bet my life the conclusion was just: impossible. 🤣

He could probably split that Nobel with Krugman—just a rough estimate, really...

Nicole Collins13 said:I had to laugh reading this. Thanks for the link. 🤣 Honestly, at first I thought Nostradamus was just some crackpot, but compared to people like this, he’s basically Color TV. 🤣 Then again, coming from a guy with a PhD in Marxist theory who ran the USDA, built a competitive socialist agricultural system, and spends his time "planning long-term growth," you’d think he’d realize that when you push Keynesian doctrine on a small, open economy, those fiscal stimulus packages are really just subsidies for foreign companies. But hey, let them celebrate. Of course, the actual solution remains invisible.
You're spot on, man. 👍

hm . . .

Just like every single one of your counterarguments... 😉

It's pretty funny how people love to label certain measures as "populist" even when they're actually happening in real life.

Take Germany or France, for example...

I suppose we have to assume we're somehow more advanced than them, otherwise, it would imply they actually have no idea what they're doing... 🙂

It’s pretty obvious what happens once the heart just stops pumping blood...

It’s just as obvious to you what would happen if someone just shot you—imagine having five liters of distilled water forced straight into your bloodstream...

Andrew Booth29 said:It’s just as obvious to you what would happen if someone just shot you—imagine having five liters of distilled water forced straight into your bloodstream...

I'm really glad we finally managed to see eye to eye on this one...

So, I guess the best move is to just leave the blood volume alone, right?

neonhound10 said:hm . . .

Just like every single one of your counterarguments... 😉

It's pretty funny how people love to label certain measures as "populist" even when they're actually happening in real life.

Take Germany or France, for example...

I suppose we have to assume we're somehow more advanced than them, otherwise, it would imply they actually have no idea what they're doing... 🙂

Again, what does it matter if everyone else is doing it? Just because they are doesn't make it right. Even if it were right for them—which they certainly believe—that same policy within that specific mental framework wouldn't work for America. Use some Mundell-Fleming and look at the data.
In reality, increasing savings and cutting consumption happens for a reason and doesn't lead to catastrophe. By your logic, deflationary periods should always result in negative growth, which isn't true. Look at the eras when Great Britain became an imperial power or when the USA saw its greatest growth spurts. Those were deflationary periods. The shift in the ratio of savings to consumption isn't a monster, nor is deflation. In fact, deflation is perfectly natural because organic economic growth is deflationary—something Nostradamus fails to grasp from the jump. Problems arise when politicians try to force the economy away from a new equilibrium for political reasons. That's when you get exactly what ABCT predicts. 😵
I don't know, I just don't see why it's so hard to understand that "excessive saving" isn't a thing. People's time preferences change, and the economy adjusts accordingly. Somehow, this creates a supposed "deflationary spiral" or a "paradox of thrift" that is meant to spin forever until we're all left standing in our underwear.
Bottom line: you don't need to increase the money supply to achieve economic growth, unless it's somehow impossible for prices to fall.

And honestly, the most interesting part about what we’re seeing here is that this drop in spending is actually just a straightforward consequence of people finally aligning their consumption with their actual income. You can't maintain that kind of imbalance forever—it's mathematically impossible. And frankly? Trying to prop it up indefinitely is nothing short of suicidal.

Nicole Collins13 said:Again, what does it matter if everyone else is doing it? Just because they are doesn't make it right. Even if it were right for them—which they certainly believe—that same policy within that specific mental framework wouldn't work for America. Use some Mundell-Fleming and look at the data.
In reality, increasing savings and cutting consumption happens for a reason and doesn't lead to catastrophe. By your logic, deflationary periods should always result in negative growth, which isn't true. Look at the eras when Great Britain became an imperial power or when the USA saw its greatest growth spurts. Those were deflationary periods. The shift in the ratio of savings to consumption isn't a monster, nor is deflation. In fact, deflation is perfectly natural because organic economic growth is deflationary—something Nostradamus fails to grasp from the jump. Problems arise when politicians try to force the economy away from a new equilibrium for political reasons. That's when you get exactly what ABCT predicts. 😵
I don't know, I just don't see why it's so hard to understand that "excessive saving" isn't a thing. People's time preferences change, and the economy adjusts accordingly. Somehow, this creates a supposed "deflationary spiral" or a "paradox of thrift" that is meant to spin forever until we're all left standing in our underwear.
Bottom line: you don't need to increase the money supply to achieve economic growth, unless it's somehow impossible for prices to fall.

It seems we clearly missed each other here, as you didn't quite catch my point about the chain reaction...
But it doesn't really matter, we're fundamentally coming from different places, and continuing this would just turn into a game of verbal ping-pong...

Nicole Collins13 said:Again, what does it matter if everyone else is doing it? Just because they are doesn't make it right. Even if it were right for them—which they certainly believe—that same policy within that specific mental framework wouldn't work for America. Use some Mundell-Fleming and look at the data.
In reality, increasing savings and cutting consumption happens for a reason and doesn't lead to catastrophe. By your logic, deflationary periods should always result in negative growth, which isn't true. Look at the eras when Great Britain became an imperial power or when the USA saw its greatest growth spurts. Those were deflationary periods. The shift in the ratio of savings to consumption isn't a monster, nor is deflation. In fact, deflation is perfectly natural because organic economic growth is deflationary—something Nostradamus fails to grasp from the jump. Problems arise when politicians try to force the economy away from a new equilibrium for political reasons. That's when you get exactly what ABCT predicts. 😵
I don't know, I just don't see why it's so hard to understand that "excessive saving" isn't a thing. People's time preferences change, and the economy adjusts accordingly. Somehow, this creates a supposed "deflationary spiral" or a "paradox of thrift" that is meant to spin forever until we're all left standing in our underwear.
Bottom line: you don't need to increase the money supply to achieve economic growth, unless it's somehow impossible for prices to fall.

I actually agree with this, it's a stance I've taken before...

Andrew Booth29 said:So, I guess the best move is to just leave the blood volume alone, right?

Not necessarily.

Have you ever heard that a healthy guy can actually donate about a pound of blood every three months... just to lend a hand to people in need??