08-25-2018, 02:30 PM
(08-25-2018, 04:08 AM)Galen Wrote:(08-19-2018, 11:57 PM)pbrower2a Wrote:(08-19-2018, 10:26 PM)Galen Wrote: Debt loads going exponential is a key sign that always tells you that the status quo is coming to an end. It is not clear what will replace it but confidence in the state will take a huge hit simply because it has been the preeminent institution for the last century or so. This has been the pattern of Western history since the Roman Empire and so it seems unlikely that this pattern will change in the near future.
Debt loads can grow with the population and with productivity, or both. Metallic currency is unlikely to outpace population growth.
At every turn you demonstrate your utter lack of knowledge in economics.
No, I often show my utter lack of knowledge of other things instead. [/snark]
The same per capita debt with a growing population is not trouble. If it grows faster than the population without concomitant economic growth, then there might be a problem. Currency based on precious metals will lessen in value with discoveries of the metals and rise in value with an increase in population and no increase in supply.
Gold is desirable as a currency metal because
(1) it is rare
(2) it is inimitable
(3) it is practically non-reactive
(4) it is practically impossible to synthesize
...Debt is one way of getting capital for establishing a profitable activity. Consider the typical electric utility. It typically floats bonds at a low interest rate (let us say 4%) and gets a predictable 7% return on its investment. What would you do with that opportunity? I would borrow as much as I could get away with! Wouldn't you? The utility has a captive market, and its rates are set (one hopes, if one is an investor or manager) by a sympathetic government.
Debt is fine if someone else is paying for it. Suppose that you are a salesman using the A******* E****** card to cover your travel expenses, and your employer expects you to have such expenses as hotels, fuels and repairs for the company card that you drive, reasonable meals, laundry and dry cleaning, etc. while you sell its things. Your expenditures on such things might be higher than your income, so you incur debt that someone else reliably pays. Fine. This is a win-win situation.
This said, there is much debt to be avoided. Reckless consumerism is suspect. Going into debt to meet ordinary living or commuting costs is a bad idea. With a government, debt that goes into show projects and unproductive enterprises is a bad idea.
Quote: Commodity money does not have to outpace population growth. What you will get as productivity increases will be a 1% to 2% price deflation every year which is what happened in the US through the late nineteenth and into the early twentieth century.
...an era of destructive booms and busts, culminating in the Great Depression after such portents as the Panic of 1893, the Panic of 1907, and the Crash of 1920.
Quote: Think for a moment even if wages remained static then purchasing power of money would increase. Instead of the poor losing ground every year they would be coming out ahead just by saving with out any risk at all.
Deflation hurts debtors.
Quote:Did it ever occur to that having the Fed creating money that is then handed to already wealthy politically connected interests is contributing to [url="https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/2017-economic-commentaries/ec-201701-monetary-policy-and-inequality.aspx]wealth inequality[/url] you libtards keep whining about. Even the idiots at the Fed are starting to figure this one out.
Of course it goes through banks, which are far from charitable as institutions.
Quote: gratuitous insult redacted
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.