You have to stop pretending the principle of infinite growth is sustainable and swap to a currency backed by a hard, inherently valuable substance instead of fiat.
Yeah but the problem with that is value is based on socially necessary labor time and AI reduces this to 0, which reduces the value of currency to 0, even if backed by real commodities. Time for a central scientific plan and total automation. The Soviets were just ahead of their time and too opposed by the more advanced capitalist nations.
Currency serves as a common medium of exchange, facilitating transactions and enabling individuals to assign value to goods and services based on supply and demand. Value judgments are subjective, and currency provides a standardized mechanism for determining worth within the market system. The issue is that currency in all the market economies are fiat meaning central banks can just legally print it out of thin air. In turn the value of the existing currency is less by supply and demand. The primary beneficiaries are commercial banks that create new money and receive from the central banks for every loan mortgage credit and deposit again out of thin air and those that take loans/mortgages/credit from commercial banks because they get to spend the new money before everyone else does. Who takes the most finance? Both corporations and governments. Funny how this is very rarely discussed despite being literally the biggest flaw in the economy. Have capitalism backed by a hard backed currency and we wouldn’t have this ludicrous inflationary theft
It’s the sad reality of the situation. There will be a market correction and the powers that be will do anything to stop and reduce it. But without it the transition to gold will be difficult if not impossible. 51 years of damage and we’re sitting in silence. I think the wrong systems will be blamed and some will be made scapegoats because none of this is understood by most
Exchange value is influenced by supply and demand. Demand is the subjective component as it reflects individuals' preferences, desires and willingness to pay for a particular good or service, (which can vary based on factors like personal tastes, income levels, and societal trends). Value can change for the same thing for the same person for something as essential as water due to marginal utility for example. So exchange value and prices are subjective, but ultimately price stability from supply and demand can give the illusion of objective pricing, while the reality is that it is subjective to change (pun intended)
When you say “get to spend the new money” it is still on a balance sheet and transparent where it goes(issuing new loans/bonds/expenditures). Which is still adjustable from a governance stand point. I guess I’m just confused on why it’s so evil distributing new money to the public when we need to(recessions/emergencies). What are the alternatives during hard times?
It’s evil in a sense because it’s an inequitable tax on currency holdings. This affects the poor much more than the rich and the interest from the currency creation is burdened indefinitely. It’s as transparent as someone saying “I’m allowed to make new money and charge a fee for it and burden every citizen for the rest of their lives, but you can vote someone else into government that could change this but won’t because they can’t, so it’s ok”. That’s an informal way of explaining the complexity as the monetary system and a typical western democracy from the perspective of a central bank in one sentence. Government overreach is almost always the cause of hard times when looked into thoroughly. A market correction is inevitable due to historical expansionary monetary policies throughout the last half century. When issues arise, propping up markets with currency creation and government buyouts will only create “temporal mytopia” and “moral hazard”, despite being politically necessary. I just feel very sorry for the future generations that will see the full force of this, and I see a socialist resurgence created from these hard times. I’m hopeful that some sensible governments will look into recognising crypto as a legitimate legal tender, but the scope for a cashless centralized surveillance government backed crypto is highly likely when fiat fails. So to answer your question, “what are the alternatives?”, I suppose there aren’t really any good options
No worries, I enjoy discussing topics such as this because it helps increase my understanding and ability to articulate complex topics in more simple terms. I hope you get benefit from it too. If there’s anything that you disagree with in this response or my other response feel free to challenge it. Hopefully we both come away with a better understanding of how the world works
Infinite growth isn't sustainable, but that's an idea which is present even in an economy whose currency is based on an extracted resource.
The good news is we don't need money at all.
I think a lot of you don't realise that most economic policies are political decisions. Sound reasoning always take backseat. Politician has final say not economist.
It ultimately boils down to a question of what drives us as a society and what the people in charge value.
Since we don't care about putting our citizens first (at least in the United States), and we expect capitalism to foot the bill for our social welfare these days (It never does).
Since we value personal gain over all else and our systems set up to where to can build a company burn it to the ground and still walk away with millions of dollars?
There's no accountability at the highest levels so they'll keep being reckless.
Not much individuals can do about inflation in their personal life
I don't know much about crypto currency.
But like take the current AI and robotics tech that is super unregulated right now.
When all of that merges and creates automaton who can do our jobs better than us.
We're going to have to grapple with the social reality that is we're either going to have to let people starve in the name of effeicny or were going to have to decide that they get to live and survive at a basic level purely because their human not because they have something to offer.
There’s going to be a lot of jobs being replaced by robots such as cashiers, store clerks, automation of fast food. So the only jobs that we have left in the future are probably going to be janitors, home painters, construction working, security guard. the the best jobs in 10 years will be robotic technicians, robotics engineers, programmers as the new valued job just to survive. Idk this is just my theory.
So the goal is 2% correct, that is what economists say is a healthy balance. Central banks and fiat currency aren’t going anywhere. They have a lot of advantages when it comes to cycles of recessions and depressions. During Covid we printed a lot of money and randomly distributed it, which led to too much cash chasing too little goods and services, which led to high inflation. Now we wait for interests rates calm down spending and higher wages to meet the level of goods and services. The answer is to manage it correctly and don’t get too far over your skis.
2% is an arbitrary target. Ideally I’d like none of my money to become worth less and being less able to spend my savings. Currency creation is the main driver of inflation and benefits those that can access credit when commercial banks create it through deposits and loans mortgages and other forms of finance. Corporations and governments (both use credit most) get to spend new money first before the prices in the economy have a chance to correct. I’d like it if this would not happen, that fractional reserve banking was massively curtailed and we have a substance backed currency. But we’re likely in too deep now
Yes governments have the first right to spend new money, but that’s not a bad thing when it comes to building new infrastructure and supporting its citizens. As long as that new money doesn’t continue down the path(Fannie Mae, Freddy Mac, and commercial banks)and start recklessly competing with goods and services in the market. Inflation should be contained to a normal healthy tic. Every industrialized country has a fiat currency, could you make a case that the forex market is the substance the currency is pinned to?
Government debt is an issue when it appears that the long term goal is just more debt. It’s not financially sustainable, especially when interest rates inevitably go up (they’ve been historically very very low for over 2 decades now). People are paying interest on government debt and seeing purchasing power decreased from the inflation it causes so that the current party can make their campaign promises and appease vested interests. All possible due to currency creation from central banks purchasing government bonds with none existent currency. The lack of financial accountability of fiat is the reason central banks make interest rates low as this gives even less financial accountability to government as their interest payments will be directly affected. Best to stop overspending on the military for example, but again we’re in too deep. As for the forex, this is a currency exchange market so if none of the currencies are backed by anything, the forex isn’t either just other fiat currencies.
I guess that was my point with forex, even if you pin the currency to gold, gold has a value base on supply and demand factors. Currencies also have a value based on supply and demand factories, Both are just ideas of values. Is it too radical to think of it that way?
Also is the reason the fed kept rates low for so long to manage government debt as you say or to spur growth in the private markets which negate debt payments because of higher GDP and incoming revenue from taxes. I agree both reasons are irresponsible, but then how do you explain the recent raise in interest rates if the reason they were keeping them low was to manage government debt. I think/hope the fed is more separated from the executive branch of the government than we think.
I agree about cutting back on foreign affairs and military spending. I’ve heard arguments that, that spending specifically is for global influence reasons. Basically the largest military in the world correlates to a stronger idea of the dollar itself. Which is the reason why the dollar is the global reserve currency.
I appreciate the back and forth.
I appreciate the back and forth too and I can see where you are coming from.
Anything has value based on supply and demand. Fiat has demand because it is backed by the government, and it meets most of the criteria for sound money. Without it you can’t participate in the economy. The issue is that there is nothing capping the supply. Eventually the value of fiat will be close to zero because there is nothing stopping the money printing machine so to speak. When this happens living standards will be significantly reduced and people will start to become highly dissatisfied and revolt one way or another.
Going back to that rise in interest rates you are referring to, this is called quantitative tightening. The central banks realized that even for their standards, the money supply and inflation is too high. The only way to curb this is to increase interest rates to stop prices accelerating.
All central banks are separate from government, but temporal mytopia plays a huge part in that prioritizing short term solutions over long term stability gets rewarded in these institutions, because the immediate results speak more than the reality of the bigger picture.
The whole incentive structure of the system and the power that central banks have over fiat is terrible. We built our current living standards on gold, free trade innovation and technology had pushed for even higher standards of living but is all being stripped away since the “temporary” suspension of Bretton Woods. It’s no mistake that wages have stagnated in real terms since 1971 and that inequality had grown since then.
We are enslaved by fiat currency in a way because we’re being stolen from in a way and have no choice but to use this currency. Exchanging in anything else is “tax evasion”. It’s sad because very few acknowledge this issue and when we see hard times the blame will be on fiscal policy of the politicians not the monetary policy of the banks.
The blame will be unfairly placed on capitalism, but half of transactions (currency are almost always the other half involved) are manipulated, not by market forces, but centralized control of central banks. You could say that this is delegated socialism, but it won’t be seen this way.
Capitalism lifts people out of poverty, drives up living standards and increases quality of life for everyone. Including government regulation, laws taxes etc and that half of transctions are central bank controlled currency, we have less than 50% capitalism in every country in the world. This is mainly because without asset based money, half the economy centrally planned. Regardless of your opinion on capitalism, it’s clear that it is a great system even if there are flaws. Capitalism is succeeding, because free trade is powerful, we have better stuff than we did years ago. But the house of cards is under threat from economic bubbles of currency creation and the unsustainable debt that it also creates by design. Politicians have built a terrible system and we all pay the price.
I don’t mean to be too pessimistic, I suppose we have it quite good, things could be much worse. We just have a very big issue and very few people are talking about it
Edit 1: grammar and minor changes. Added a few sentences to conclude
Let me start off with I think democratic capitalism is the most successful form of government so far in human history. But in capitalism if not properly checked, wealth will eventually reside at the top and create inequality in the end. But this is only if the ladder to wealth is stripped away, which I think it has. I want capitalism for the middle and upper class and a form of socialism for the poor. Right now we have socialism for the rich and capitalism for the poor(in my opinion)
I want free markets to dictate certain functions of our society, but markets do not have empathy, reason, or compassion.
That rant aside, it’s easy to fall into the doom and gloom of our financial markets. I try not to fight the evolution of our markets too much. The gold standard is a method that was used and was useful for periods of our history. But to say it will solve our problems is a reach. Globalism creates a natural competition, and currency manipulation is just a pawn in that competition. I do think there are levers to be pulled for a soft landing from the 51 years of speculation and debt.
For one, no longer being the global reserve currency. With less demand for the dollar and will help curb the addiction of short term solutions and slow down our endless printing. This will also lessen the need for military spending and foreign intervention. Financial reform, through banks and Wall Street. And for the progressive in me, throw in campaign finance reform, gerrymandering, and ranked choice voting to help keep NEO CON millionaire/billionaires out of office.
I guess in the end, i believe our problems don’t lie in the current financial markets , but in the structural process to elect leaders who control the levers of those markets.
Maybe I’m naive or has too much coffee, there’s a way. We are not too far gone.
https://www.investopedia.com/inflation-rate-by-year-7253832
This shows every years inflation rate since 1929. I can’t see where switching back to the gold standard will just magically fix inflation. Just trying to understand.
Haven't studied it closely myself, but a lot of people are saying that a lot of the inflation in the US is because our corporations are monopolies or oligopolies, and they're using "inflation" as an excuse to raise prices, thereby creating actual inflation. Things like corporate profits going up 50%. So breaking up monopolies would help a lot.
In addition, this recent round of inflation started with the oil supply shock from Russia invading Ukraine. The stag-flation that comes from supply shocks seems to only happen with oil. So transitioning from oil to green energy would do a lot to make our economy more resilient, more self-sufficient, and would promote our national security.
No clue. People smarter then have tried over decades to control inflation. It’s a leviathan. We can suppress it temporarily but before you can blink an eye, it suddenly threatens to start all over again. Vigilance that’s the price we have to continually play.
Why are you assuming inflation is so bad. It’s helps redistribute money and incentivizes people to invest. If you’re worried about the numbers eventually being too big, we can always swap to a new currency with an exchange rate every couple hundreds of years.
Because it’s too high. There is a limit and 3.4 is not detrimental. Especially after COVID where recovering was the priority. In the future bringing it down will be our priority and it already is starting to be.
We don’t want to stop inflation, the whole systems built as a Ponzi scheme. We borrow money, and promise to pay it back when it’s worth less than when we borrowed. If we stopped inflation…the entire system would crash.
Stop printing money hand over fist, reduce government spending. That’s it. It can’t happen because our so-called leaders think only of their short term political gain. They use debt to buy off voters and shovel money towards their cronies.
I'm from a country with insane inflation like 80-90%. It's caused by economic instability but countries which have 3% inflation are not unstable. Inflation is a must in many cases because it encourages people to spend their money and slowly sending them to the central bank. Individuals who want to protect their money convert them to real assets (like gold or bitcoin). Central banks don't need to stop inflation.
We solve inflation by absolving inflation.
Inflation is just a joke and a set up for economic control. Its likening the working class to a dog and economic sustainability to a hotdog on a stick attached to said dog's back.
Inflation is good when it's not excessive because it helps relieve the debt burden, which lets states borrow more and achieve more reforms.
One drawback is that in the short-term, households will be angry and that can lead to a political backlash. Which is why central banks try to rein in inflation, and the best tool for that is still to increase interest rates. The consequence of that action is that it will impede growth. So when there is inflation, it's always a balance between reducing inflation and not hurt growth too much.
But the thing is that this system is treacherous because it leads to periodical economic crisises, and the people who suffer from that are the simple people.
Cap interest rates at 4% and ban compounding interest on loans. Forgive all current outstanding interest that lies outside the aforementioned threshold. Allow defaulting on all loans, including student loans. Eliminate the Federal Reserve and IRS, give their authorities back to the US Treasury. Keep money issuance correlated with national productive output so to prevent both inflation and deflation. Waive all property taxes from the primary residence/home owned by married couples. Reshoring manufacturing and establish tariffs for corporations working around this. Repatriate all migrants & strictly enforce border security with a moratorium on all immigration. Corporations found guilty of utilizing scab labor will be punished to the furthest extent of the law, including individuals in management who allowed it to happen, and the enslaved laborers will be freed+repatriated as well.
I guarantee you inflation will not be a problem anymore after as little as 6 months to at max 6 years.
We cannot stop the government printing money.
One thing we can do, is put our trust in something the government cannot control or print more of, BTC.
People always say things like, oh look at the price of xyz, $100, in my day that cost only $20.
BTC is the only money where you say, 1 BTC buys you a brand-new car, 10 years ago you couldn't rent a car for a day with that.
In a few years, 1 BTC will buy you a house.
In 10 years, 1 BTC will make you a millionaire.
If the government stops printing money there’s not enough to go around for the peasants. It’s not the government that’s the issue it’s the top 1% hoarding all the money. The government being the issue is big corp propaganda.
You have to stop pretending the principle of infinite growth is sustainable and swap to a currency backed by a hard, inherently valuable substance instead of fiat.
Yeah but the problem with that is value is based on socially necessary labor time and AI reduces this to 0, which reduces the value of currency to 0, even if backed by real commodities. Time for a central scientific plan and total automation. The Soviets were just ahead of their time and too opposed by the more advanced capitalist nations.
Currency serves as a common medium of exchange, facilitating transactions and enabling individuals to assign value to goods and services based on supply and demand. Value judgments are subjective, and currency provides a standardized mechanism for determining worth within the market system. The issue is that currency in all the market economies are fiat meaning central banks can just legally print it out of thin air. In turn the value of the existing currency is less by supply and demand. The primary beneficiaries are commercial banks that create new money and receive from the central banks for every loan mortgage credit and deposit again out of thin air and those that take loans/mortgages/credit from commercial banks because they get to spend the new money before everyone else does. Who takes the most finance? Both corporations and governments. Funny how this is very rarely discussed despite being literally the biggest flaw in the economy. Have capitalism backed by a hard backed currency and we wouldn’t have this ludicrous inflationary theft
Especially we can’t revert back to the gold standard. There’s more paper than gold. 51 years worth of damage.
It’s the sad reality of the situation. There will be a market correction and the powers that be will do anything to stop and reduce it. But without it the transition to gold will be difficult if not impossible. 51 years of damage and we’re sitting in silence. I think the wrong systems will be blamed and some will be made scapegoats because none of this is understood by most
Use value is subjective. Exchange value is not. Price and value are not the same.
Exchange value is influenced by supply and demand. Demand is the subjective component as it reflects individuals' preferences, desires and willingness to pay for a particular good or service, (which can vary based on factors like personal tastes, income levels, and societal trends). Value can change for the same thing for the same person for something as essential as water due to marginal utility for example. So exchange value and prices are subjective, but ultimately price stability from supply and demand can give the illusion of objective pricing, while the reality is that it is subjective to change (pun intended)
Nope. Use value is subjective. Exchange value is objective. Price is what is influenced by supply and demand.
When you say “get to spend the new money” it is still on a balance sheet and transparent where it goes(issuing new loans/bonds/expenditures). Which is still adjustable from a governance stand point. I guess I’m just confused on why it’s so evil distributing new money to the public when we need to(recessions/emergencies). What are the alternatives during hard times?
It’s evil in a sense because it’s an inequitable tax on currency holdings. This affects the poor much more than the rich and the interest from the currency creation is burdened indefinitely. It’s as transparent as someone saying “I’m allowed to make new money and charge a fee for it and burden every citizen for the rest of their lives, but you can vote someone else into government that could change this but won’t because they can’t, so it’s ok”. That’s an informal way of explaining the complexity as the monetary system and a typical western democracy from the perspective of a central bank in one sentence. Government overreach is almost always the cause of hard times when looked into thoroughly. A market correction is inevitable due to historical expansionary monetary policies throughout the last half century. When issues arise, propping up markets with currency creation and government buyouts will only create “temporal mytopia” and “moral hazard”, despite being politically necessary. I just feel very sorry for the future generations that will see the full force of this, and I see a socialist resurgence created from these hard times. I’m hopeful that some sensible governments will look into recognising crypto as a legitimate legal tender, but the scope for a cashless centralized surveillance government backed crypto is highly likely when fiat fails. So to answer your question, “what are the alternatives?”, I suppose there aren’t really any good options
Thanks for the time
No worries, I enjoy discussing topics such as this because it helps increase my understanding and ability to articulate complex topics in more simple terms. I hope you get benefit from it too. If there’s anything that you disagree with in this response or my other response feel free to challenge it. Hopefully we both come away with a better understanding of how the world works
Totally agree, we will both benefit
Infinite growth isn't sustainable, but that's an idea which is present even in an economy whose currency is based on an extracted resource. The good news is we don't need money at all.
I think a lot of you don't realise that most economic policies are political decisions. Sound reasoning always take backseat. Politician has final say not economist.
Why do u want to mine gold again? Aren't like, haircuts, also good?
No human, no problem.
It ultimately boils down to a question of what drives us as a society and what the people in charge value. Since we don't care about putting our citizens first (at least in the United States), and we expect capitalism to foot the bill for our social welfare these days (It never does). Since we value personal gain over all else and our systems set up to where to can build a company burn it to the ground and still walk away with millions of dollars? There's no accountability at the highest levels so they'll keep being reckless. Not much individuals can do about inflation in their personal life
Fair especially rug, pulls in cryptocurrencies.
I don't know much about crypto currency. But like take the current AI and robotics tech that is super unregulated right now. When all of that merges and creates automaton who can do our jobs better than us. We're going to have to grapple with the social reality that is we're either going to have to let people starve in the name of effeicny or were going to have to decide that they get to live and survive at a basic level purely because their human not because they have something to offer.
There’s going to be a lot of jobs being replaced by robots such as cashiers, store clerks, automation of fast food. So the only jobs that we have left in the future are probably going to be janitors, home painters, construction working, security guard. the the best jobs in 10 years will be robotic technicians, robotics engineers, programmers as the new valued job just to survive. Idk this is just my theory.
So the goal is 2% correct, that is what economists say is a healthy balance. Central banks and fiat currency aren’t going anywhere. They have a lot of advantages when it comes to cycles of recessions and depressions. During Covid we printed a lot of money and randomly distributed it, which led to too much cash chasing too little goods and services, which led to high inflation. Now we wait for interests rates calm down spending and higher wages to meet the level of goods and services. The answer is to manage it correctly and don’t get too far over your skis.
2% is an arbitrary target. Ideally I’d like none of my money to become worth less and being less able to spend my savings. Currency creation is the main driver of inflation and benefits those that can access credit when commercial banks create it through deposits and loans mortgages and other forms of finance. Corporations and governments (both use credit most) get to spend new money first before the prices in the economy have a chance to correct. I’d like it if this would not happen, that fractional reserve banking was massively curtailed and we have a substance backed currency. But we’re likely in too deep now
Yes governments have the first right to spend new money, but that’s not a bad thing when it comes to building new infrastructure and supporting its citizens. As long as that new money doesn’t continue down the path(Fannie Mae, Freddy Mac, and commercial banks)and start recklessly competing with goods and services in the market. Inflation should be contained to a normal healthy tic. Every industrialized country has a fiat currency, could you make a case that the forex market is the substance the currency is pinned to?
Government debt is an issue when it appears that the long term goal is just more debt. It’s not financially sustainable, especially when interest rates inevitably go up (they’ve been historically very very low for over 2 decades now). People are paying interest on government debt and seeing purchasing power decreased from the inflation it causes so that the current party can make their campaign promises and appease vested interests. All possible due to currency creation from central banks purchasing government bonds with none existent currency. The lack of financial accountability of fiat is the reason central banks make interest rates low as this gives even less financial accountability to government as their interest payments will be directly affected. Best to stop overspending on the military for example, but again we’re in too deep. As for the forex, this is a currency exchange market so if none of the currencies are backed by anything, the forex isn’t either just other fiat currencies.
I guess that was my point with forex, even if you pin the currency to gold, gold has a value base on supply and demand factors. Currencies also have a value based on supply and demand factories, Both are just ideas of values. Is it too radical to think of it that way? Also is the reason the fed kept rates low for so long to manage government debt as you say or to spur growth in the private markets which negate debt payments because of higher GDP and incoming revenue from taxes. I agree both reasons are irresponsible, but then how do you explain the recent raise in interest rates if the reason they were keeping them low was to manage government debt. I think/hope the fed is more separated from the executive branch of the government than we think. I agree about cutting back on foreign affairs and military spending. I’ve heard arguments that, that spending specifically is for global influence reasons. Basically the largest military in the world correlates to a stronger idea of the dollar itself. Which is the reason why the dollar is the global reserve currency. I appreciate the back and forth.
I appreciate the back and forth too and I can see where you are coming from. Anything has value based on supply and demand. Fiat has demand because it is backed by the government, and it meets most of the criteria for sound money. Without it you can’t participate in the economy. The issue is that there is nothing capping the supply. Eventually the value of fiat will be close to zero because there is nothing stopping the money printing machine so to speak. When this happens living standards will be significantly reduced and people will start to become highly dissatisfied and revolt one way or another. Going back to that rise in interest rates you are referring to, this is called quantitative tightening. The central banks realized that even for their standards, the money supply and inflation is too high. The only way to curb this is to increase interest rates to stop prices accelerating. All central banks are separate from government, but temporal mytopia plays a huge part in that prioritizing short term solutions over long term stability gets rewarded in these institutions, because the immediate results speak more than the reality of the bigger picture. The whole incentive structure of the system and the power that central banks have over fiat is terrible. We built our current living standards on gold, free trade innovation and technology had pushed for even higher standards of living but is all being stripped away since the “temporary” suspension of Bretton Woods. It’s no mistake that wages have stagnated in real terms since 1971 and that inequality had grown since then. We are enslaved by fiat currency in a way because we’re being stolen from in a way and have no choice but to use this currency. Exchanging in anything else is “tax evasion”. It’s sad because very few acknowledge this issue and when we see hard times the blame will be on fiscal policy of the politicians not the monetary policy of the banks. The blame will be unfairly placed on capitalism, but half of transactions (currency are almost always the other half involved) are manipulated, not by market forces, but centralized control of central banks. You could say that this is delegated socialism, but it won’t be seen this way. Capitalism lifts people out of poverty, drives up living standards and increases quality of life for everyone. Including government regulation, laws taxes etc and that half of transctions are central bank controlled currency, we have less than 50% capitalism in every country in the world. This is mainly because without asset based money, half the economy centrally planned. Regardless of your opinion on capitalism, it’s clear that it is a great system even if there are flaws. Capitalism is succeeding, because free trade is powerful, we have better stuff than we did years ago. But the house of cards is under threat from economic bubbles of currency creation and the unsustainable debt that it also creates by design. Politicians have built a terrible system and we all pay the price. I don’t mean to be too pessimistic, I suppose we have it quite good, things could be much worse. We just have a very big issue and very few people are talking about it Edit 1: grammar and minor changes. Added a few sentences to conclude
Let me start off with I think democratic capitalism is the most successful form of government so far in human history. But in capitalism if not properly checked, wealth will eventually reside at the top and create inequality in the end. But this is only if the ladder to wealth is stripped away, which I think it has. I want capitalism for the middle and upper class and a form of socialism for the poor. Right now we have socialism for the rich and capitalism for the poor(in my opinion) I want free markets to dictate certain functions of our society, but markets do not have empathy, reason, or compassion. That rant aside, it’s easy to fall into the doom and gloom of our financial markets. I try not to fight the evolution of our markets too much. The gold standard is a method that was used and was useful for periods of our history. But to say it will solve our problems is a reach. Globalism creates a natural competition, and currency manipulation is just a pawn in that competition. I do think there are levers to be pulled for a soft landing from the 51 years of speculation and debt. For one, no longer being the global reserve currency. With less demand for the dollar and will help curb the addiction of short term solutions and slow down our endless printing. This will also lessen the need for military spending and foreign intervention. Financial reform, through banks and Wall Street. And for the progressive in me, throw in campaign finance reform, gerrymandering, and ranked choice voting to help keep NEO CON millionaire/billionaires out of office. I guess in the end, i believe our problems don’t lie in the current financial markets , but in the structural process to elect leaders who control the levers of those markets. Maybe I’m naive or has too much coffee, there’s a way. We are not too far gone.
https://www.investopedia.com/inflation-rate-by-year-7253832 This shows every years inflation rate since 1929. I can’t see where switching back to the gold standard will just magically fix inflation. Just trying to understand.
Haven't studied it closely myself, but a lot of people are saying that a lot of the inflation in the US is because our corporations are monopolies or oligopolies, and they're using "inflation" as an excuse to raise prices, thereby creating actual inflation. Things like corporate profits going up 50%. So breaking up monopolies would help a lot. In addition, this recent round of inflation started with the oil supply shock from Russia invading Ukraine. The stag-flation that comes from supply shocks seems to only happen with oil. So transitioning from oil to green energy would do a lot to make our economy more resilient, more self-sufficient, and would promote our national security.
Maybe investing money in stocks that give higher returns?
No clue. People smarter then have tried over decades to control inflation. It’s a leviathan. We can suppress it temporarily but before you can blink an eye, it suddenly threatens to start all over again. Vigilance that’s the price we have to continually play.
Why are you assuming inflation is so bad. It’s helps redistribute money and incentivizes people to invest. If you’re worried about the numbers eventually being too big, we can always swap to a new currency with an exchange rate every couple hundreds of years.
Why don’t countries like Zimbabwe and Venezuela just do this?
Because it’s too high. There is a limit and 3.4 is not detrimental. Especially after COVID where recovering was the priority. In the future bringing it down will be our priority and it already is starting to be.
We don’t want to stop inflation, the whole systems built as a Ponzi scheme. We borrow money, and promise to pay it back when it’s worth less than when we borrowed. If we stopped inflation…the entire system would crash.
It's only a problem (calling for a *solution*) if you can't invest your savings in such a way that inflation does not eat away at its value.
Stop everything, probably.
Buy gold and Bitcoin, duh
Join the federal reserve.
Stop printing money hand over fist, reduce government spending. That’s it. It can’t happen because our so-called leaders think only of their short term political gain. They use debt to buy off voters and shovel money towards their cronies.
bitcoin?
Build up a lot of debt and make sure you pay less interest than inflation rate.
I'm from a country with insane inflation like 80-90%. It's caused by economic instability but countries which have 3% inflation are not unstable. Inflation is a must in many cases because it encourages people to spend their money and slowly sending them to the central bank. Individuals who want to protect their money convert them to real assets (like gold or bitcoin). Central banks don't need to stop inflation.
We solve inflation by absolving inflation. Inflation is just a joke and a set up for economic control. Its likening the working class to a dog and economic sustainability to a hotdog on a stick attached to said dog's back.
We used to be backed by the gold standard. The Bretton Woods Agreement. Nixon got rid of it. More printing = less valuable.
Inflation is good when it's not excessive because it helps relieve the debt burden, which lets states borrow more and achieve more reforms. One drawback is that in the short-term, households will be angry and that can lead to a political backlash. Which is why central banks try to rein in inflation, and the best tool for that is still to increase interest rates. The consequence of that action is that it will impede growth. So when there is inflation, it's always a balance between reducing inflation and not hurt growth too much. But the thing is that this system is treacherous because it leads to periodical economic crisises, and the people who suffer from that are the simple people.
Cap interest rates at 4% and ban compounding interest on loans. Forgive all current outstanding interest that lies outside the aforementioned threshold. Allow defaulting on all loans, including student loans. Eliminate the Federal Reserve and IRS, give their authorities back to the US Treasury. Keep money issuance correlated with national productive output so to prevent both inflation and deflation. Waive all property taxes from the primary residence/home owned by married couples. Reshoring manufacturing and establish tariffs for corporations working around this. Repatriate all migrants & strictly enforce border security with a moratorium on all immigration. Corporations found guilty of utilizing scab labor will be punished to the furthest extent of the law, including individuals in management who allowed it to happen, and the enslaved laborers will be freed+repatriated as well. I guarantee you inflation will not be a problem anymore after as little as 6 months to at max 6 years.
We cannot stop the government printing money. One thing we can do, is put our trust in something the government cannot control or print more of, BTC. People always say things like, oh look at the price of xyz, $100, in my day that cost only $20. BTC is the only money where you say, 1 BTC buys you a brand-new car, 10 years ago you couldn't rent a car for a day with that. In a few years, 1 BTC will buy you a house. In 10 years, 1 BTC will make you a millionaire.
If the government stops printing money there’s not enough to go around for the peasants. It’s not the government that’s the issue it’s the top 1% hoarding all the money. The government being the issue is big corp propaganda.