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4T? What 4T?
#61
(06-01-2016, 08:46 PM)Kinser79 Wrote:
(06-01-2016, 12:31 PM)Mikebert Wrote: [Kinser] If one has a silver certificate for 10 dollars then yes you can go to the bank and get 10 dollars worth of silver.  Pretty simple really.
[Mike] Um no, you could not go to your local bank, “the silver certificates could only be redeemed in person at the New York or San Francisco Assay Offices”.
 
Individual citizens redemption of currency for specie was not a major route through which the gold standard worked.  Most of the action was by institutions and occurred at the Federal Reserve level.

Immaterial.  The fact is that one could take their silver certificate and get silver for it.  You're not seeing the forest for the goddamned trees as usual Mike.

(06-01-2016, 02:33 PM)Mikebert Wrote: [Kinser]That being said, one has to recognize that there hasn't been silver coinage in this country since 1964.  I find it interesting though that if one takes the minimum wage from 1964 ($1.25 per hour) or 5 silver quarters, one would come out with just slightly less than a troy ounce of silver (all silver coinage is debased with some content of copper for wear purposes).  Furthermore that this would be in the 15 dollar range, the very wage so many seem to be demanding for minimum wage workers.
 
[Mike]What would a wage of 1.25 silver dollars look like over the 1970-2015 period based on current silver prices adjusted to today’s dollars. Obviously no employer in 1980 was going to pay the equivalent today of $46 wages to unskilled workers.  Clearly the minimum wage would have to be abolished or reduced.  Suppose it was lowered to 0.30 silver dollars per hour ($11.2 in today’s money) and then kept there.  After 1989 wages would fluctuate between $1.60 and $4.70 in today’s money. Can you see how the huge volatility of the silver market makes this untenable?

The volatility in the silver market is due to the fact that currency is not defined in terms of silver.  When the Dollar was defined as 3/4ths of a troy ounce of silver the dollar was worth exactly that.  27g of silver would always be a dollar.  You're interpreting speculation based in fiat currency for the value of money based on a commodity.

You have it exactly right.  That spike in 1980 was the Hunt brothers trying to corner the silver market which wouldn't have happened under a gold or silver coin standard.  My personal take is that they thought the excessive inflation of the Carter years was going to get worse.  It would have except for Volcker jacking up interest rates and Reagan's willingness to suffer through a very sharp recession.
Democracy is the theory that the common people know what they want, and deserve to get it good and hard. -- H.L. Mencken

If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action.   -- Ludwig von Mises
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#62
[Kinser]When the Dollar was defined as 3/4ths of a troy ounce of silver the dollar was worth exactly that.

No.  It was a GOLD standard, not a silver standard.  Didn't you even look at the link I gave?  The value of the silver in a silver dollar was LESS than a dollar.  It had to be so, or people would have melted down to coins to get the silver.  Since the ratio of silver to gold tended to rise over time, under a gold standard this would likely remain the case.  As I wrote this was the crux of the issue the free silver folks had.  The gold standard was flawed because the supply of gold rose too slowly, since silver grew more rapidly it was preferred to gold for a growing economy.  The too-restrictive gold standard penalized productive folks to the benefit of rentiers.  On the other side the bankers were opposed to a silver standard because they (rightly) saw it as inflationary, and so bad for holders of money, stocks* and bonds.

*Until 1916 stocks were priced like bonds, and thought to be no different than the perpetual bonds (e.g. British Consols) developed in the 18th century that had been called government "stock".
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#63
[Galen]That spike in 1980 was the Hunt brothers trying to corner the silver market which wouldn't have happened under a gold or silver coin standard.
[Mike]Exactly. That was my point, you cannot extrapolate the value of a 1964 minimum wage of 0.96 oz silver to today using the market silver prices. You can using one of the inflation indices like the CPI. The point is, under a gold standard the ratio of the CPI and the POG is range bound with the former rising above the latter during wars and then falling back to the baseline afterward.
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#64
(06-02-2016, 10:18 AM)Mikebert Wrote: [Galen]That spike in 1980 was the Hunt brothers trying to corner the silver market which wouldn't have happened under a gold or silver coin standard.
[Mike]Exactly.  That was my point, you cannot extrapolate the value of a 1964 minimum wage of 0.96 oz silver to today using the market silver prices.  You can using one of the inflation indices like the CPI.  The point is, under a gold standard the ratio of the CPI and the POG is range bound with the former rising above the latter during wars and then falling back to the baseline afterward.

Even more, the economy is very different. The American economy was very different from what it is now. 52 years ago (it has been that long since the US Mint coined silver for dimes and quarters) the basis of the American economy had far more emphasis on tangible goods. If we wanted information we bought it in the form of printed material.  One needs no longer buy this


http://www.gutenberg.org/ebooks/19942?ms...e_stranger

(Candide) as a dead-tree edition. Electronic representations have become much more inexpensive than paper, ink, and binding. I have not bought a public-domain book since I found Project Gutenberg a few years ago.

Figure also that electronic innovations have made some of our entertainment devices far cheaper. How cheap? A 25" diagonal TV is now rather small... but there was a time when having a 25" diagonal color TV truly impressed all but the snobs. Of course that 25" diagonal color TV may have had "French provincial" cabinetry, generally not available today. Get your own d@mn cabinet, which is still very expensive because it itself is a "dead tree edition".  Encyclopaedia Britannica last published a print version set several years ago.

The early-industrial stuff like furniture, TV dinners (they are still sold, but not as such anymore because "TV" no longer impresses people), Waterford crystal, refrigerators, automobiles, stoves, and stereo speakers (the latter are not high-tech devices) have risen in price with inflation. Blank-check economics, the norm for much in American life, works as exploitatively as one would expect.

Of course raw labor has become incredibly cheap. People can live on the minimum wage, but they would have to be stuffed like sardines into decrepit trailers or apartments. Poverty is the pervasive American nightmare, and we all fear it almost as much as the Grim Reaper. Maybe even more.
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.


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#65
(06-01-2016, 03:23 PM)Mikebert Wrote: [Galen]I have always found it interesting that those who are so public about supporting the poor will not recognize the harm that inflation does.

[Mike]The reason is history. One can read about the positions on money during the gold standard and see which policy each side favored.  Inevitably, the banksters were all huge gold standard fans, while the various populist parties were opposed.  People are not stupid.  If you have money, inflation is enemy #1, given a choice between inflation and confiscatory taxation, wealth holder will chose the latter,  Why else did President Hoover and the Congressional Republicans choose to raise the top tax rate from 25% to 60% in the early 1930's?  Also anyone who lived through the 1970's can tell you how inflation was hell on investments.  America got its first billionaries in the 1930's.  By 1980 all the billionaires were gone despite the fact the dollar was worth much less than it had been less the richest men simply were absolutely richer in 1940 than in 1980. It was inflation over 1940-1980 that killed them. Didn't hurt working people.

Since 1980 it has been hell on working people just like it had been hell on their bosses in the forty years earlier.  The reason, the capitalists have had the upper hand since 1980 whereas labor and their political allies had had the upper hand before then.

If the previous time frames are any guide, then the pendulum should begin swinging back toward a model favoring workers beginning around 2020. Seems like we have a long way to go to get anywhere near that point, however. It would require the so-called revolution begun by the Bernie Sanders camp to wield more influence in the citadels of power.
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#66
(06-02-2016, 03:58 PM)pbrower2a Wrote:
(06-02-2016, 10:18 AM)Mikebert Wrote: [Galen]That spike in 1980 was the Hunt brothers trying to corner the silver market which wouldn't have happened under a gold or silver coin standard.
[Mike]Exactly.  That was my point, you cannot extrapolate the value of a 1964 minimum wage of 0.96 oz silver to today using the market silver prices.  You can using one of the inflation indices like the CPI.  The point is, under a gold standard the ratio of the CPI and the POG is range bound with the former rising above the latter during wars and then falling back to the baseline afterward.

Even more, the economy is very different. The American economy was very different from what it is now. 52 years ago (it has been that long since the US Mint coined silver for dimes and quarters) the basis of the American economy had far more emphasis on tangible goods. If we wanted information we bought it in the form of printed material.  One needs no longer buy this


http://www.gutenberg.org/ebooks/19942?ms...e_stranger

(Candide) as a dead-tree edition. Electronic representations have become much more inexpensive than paper, ink, and binding. I have not bought a public-domain book since I found Project Gutenberg a few years ago.

Figure also that electronic innovations have made some of our entertainment devices far cheaper. How cheap? A 25" diagonal TV is now rather small... but there was a time when having a 25" diagonal color TV truly impressed all but the snobs. Of course that 25" diagonal color TV may have had "French provincial" cabinetry, generally not available today. Get your own d@mn cabinet, which is still very expensive because it itself is a "dead tree edition".  Encyclopaedia Britannica last published a print version set several years ago.

The early-industrial stuff like furniture, TV dinners (they are still sold, but not as such anymore because "TV" no longer impresses people), Waterford crystal, refrigerators, automobiles, stoves, and stereo speakers (the latter are not high-tech devices) have risen in price with inflation. Blank-check economics, the norm for much in American life, works as exploitatively as one would expect.

Of course raw labor has become incredibly cheap. People can live on the minimum wage, but they would have to be stuffed like sardines into decrepit trailers or apartments. Poverty is the pervasive  American nightmare, and we all fear it almost as much as the Grim Reaper. Maybe even more.
Your last paragraph explains why I feel that today's society could never cope with a 1930s style Great Depression. For no other reason that material expectations have shot way up since that times. It would no doubt require that many sacrifice some if not the bulk of their technology, and without that most folks under 40 especially would feel like fish out of water. But poverty is considerable more hidden than it was in earlier times, and over the past couple of decades many large cities such as Chicago have gentrified so much that in most of the city poverty is very severely hidden from most public view.
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#67
(06-02-2016, 06:58 PM)beechnut79 Wrote:
(06-02-2016, 03:58 PM)pbrower2a Wrote:
(06-02-2016, 10:18 AM)Mikebert Wrote: [Galen]That spike in 1980 was the Hunt brothers trying to corner the silver market which wouldn't have happened under a gold or silver coin standard.
[Mike]Exactly.  That was my point, you cannot extrapolate the value of a 1964 minimum wage of 0.96 oz silver to today using the market silver prices.  You can using one of the inflation indices like the CPI.  The point is, under a gold standard the ratio of the CPI and the POG is range bound with the former rising above the latter during wars and then falling back to the baseline afterward.

Even more, the economy is very different. The American economy was very different from what it is now. 52 years ago (it has been that long since the US Mint coined silver for dimes and quarters) the basis of the American economy had far more emphasis on tangible goods. If we wanted information we bought it in the form of printed material.  One needs no longer buy this


http://www.gutenberg.org/ebooks/19942?ms...e_stranger

(Candide) as a dead-tree edition. Electronic representations have become much more inexpensive than paper, ink, and binding. I have not bought a public-domain book since I found Project Gutenberg a few years ago.

Figure also that electronic innovations have made some of our entertainment devices far cheaper. How cheap? A 25" diagonal TV is now rather small... but there was a time when having a 25" diagonal color TV truly impressed all but the snobs. Of course that 25" diagonal color TV may have had "French provincial" cabinetry, generally not available today. Get your own d@mn cabinet, which is still very expensive because it itself is a "dead tree edition".  Encyclopaedia Britannica last published a print version set several years ago.

The early-industrial stuff like furniture, TV dinners (they are still sold, but not as such anymore because "TV" no longer impresses people), Waterford crystal, refrigerators, automobiles, stoves, and stereo speakers (the latter are not high-tech devices) have risen in price with inflation. Blank-check economics, the norm for much in American life, works as exploitatively as one would expect.

Of course raw labor has become incredibly cheap. People can live on the minimum wage, but they would have to be stuffed like sardines into decrepit trailers or apartments. Poverty is the pervasive  American nightmare, and we all fear it almost as much as the Grim Reaper. Maybe even more.
Your last paragraph explains why I feel that today's society could never cope with a 1930s style Great Depression. For no other reason that material expectations have shot way up since that times. It would no doubt require that many sacrifice some if not the bulk of their technology, and without that most folks under 40 especially would feel like fish out of water. But poverty is considerable more hidden than it was in earlier times, and over the past couple of decades many large cities such as Chicago have gentrified so much that in most of the city poverty is very severely hidden from most public view.


Depressions bring the end to business practices and technologies at the end of their run. At times it is the recent high-flying scammers who prove themselves obsolete when they are still new (especially in the Degeneracy in which they form); at times it is venerable technologies and organizations whose time of demise comes when further infusions of capital dry up. Maybe a creditor recognizes that the land booked at 1930s prices is worth more than the store or manufacturing outlet atop it, and maybe it is best that the operation work as a going concern so that it can sell off its stuff. When it can't sell the stuff the creditor takes over, closes the firm, demolishes the decrepit operation, and redevelops it.

Get an Android ® device for about $50 and you can get Project Gutenberg, which consists of a huge assortment of public-domain books from the Egyptian Book of the Dead to Finnegan's Wake. Wi-Fi  is available almost everywhere, and it does much that the mail service, the phone company, a record company, a bookseller, and the cable company used to do.  If your tablet costs less than a carton of cancerettes and contains access to a nearly-unlimited library, think of all that you need not buy.

I miss being able to browse through bargain book dealers and maybe come up with a close-out or two. That is over. I haven't bought a public-domain book for a long time, and the only reason for me to do so is to have one as an objet d'art. Archaism can be beautiful.

We see the dematerialization of information.

The technology that we are losing is old technology -- books, landline phones, recorded media, and cable television -- and old ways of doing business, like shopping malls and department stores. But does it really die or does it end up at Goodwill or Salvation Army for sale cheaply to people who are willing to rely upon outdated technology like VHS tapes and records of Herb Alpert and the Tijuana Brass?

It is possible that we are entering a high-tech version of feudalism, something in which much of the productivity goes to the ostentatious splendor of irresponsible elites? If history is really cyclical, then we might be headed back to some era in which elites could expend huge amounts of outrageously-cheap labor, maybe as liveried servants. Maybe we will find employers treating their workers as if serfs as established in Nazi Germany.

Or could we be entering a new era in which commodity fetishes die except as expressions of pathological thought?
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.


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#68
(06-02-2016, 06:53 PM)beechnut7 Wrote: If the previous time frames are any guide, then the pendulum should begin swinging back toward a model favoring workers beginning around 2020. Seems like we have a long way to go to get anywhere near that point, however. It would require the so-called revolution begun by the Bernie Sanders camp to wield more influence in the citadels of power.
One would think so, but the phenomenon of Trump and Sanders argues against this.  Last 4T socially conservative Southern and immigrant members of the working class were in the Democratic party for historical reasons. The Democratic party was led by Progressive and Southern WASPs and the Democratic economic message was  acceptable to Republican working class WASPs because it came from people like them. Today, working class Americans of European heritage are largely immune to any economic messages from Democrats because they are not led by people like them (e.g. President Obama, Hillary Clinton, Nancy Pelosi).  As a result the working class is split and they flock to two very different candidates whose message (as perceived by their working class audiences) are very similar.  There is no economic argument or set of policies that could persuade Trump supporters to move to Sanders or vice versa.

So the choice will come down to how much do you fear the tail-risk of a president Trump.  On one side you have Clinton, who from a working class perspective represents various degrees of suckitude, or Trump who is a roll of the dice.  Maybe you get lucky and he turns out good, but then you might roll snake-eyes.
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#69
(06-02-2016, 10:01 AM)Mikebert Wrote: [Kinser]When the Dollar was defined as 3/4ths of a troy ounce of silver the dollar was worth exactly that.

No.  It was a GOLD standard, not a silver standard.  Didn't you even look at the link I gave?

I did, and yes there was a gold standard in place. The existence of the gold standard at the time is irrelevant, again you're seeing trees but not the forest. That is a common problem for you, actually. However, silver coinage has traditionally held the amount of silver that was worth the value of the coin, minus alloying for wear (which is expected and not general debasement).

 
Quote:The value of the silver in a silver dollar was LESS than a dollar.  It had to be so, or people would have melted down to coins to get the silver.

Actually no they wouldn't. It is the same reason that people wouldn't melt down pre 1982 pennies to get the copper after a economic collapse and the use of those copper coins as a medium of exchange in the absence of other, better coins. The reason is rather simple, a lump of silver of an undetermined purity is not fungible whereas a coin with the likeness of a ruler is known and fungible.

Money whether it is representational (IE paper and token coinage convertable into gold and/or silver) or otherwise must have various properties.

1. It must be a store of value. (That is why bananas are not money...they rot rather quickly)
2. It must be easily divisible. (in olden times silver pennies would be cut on a cross to make halfpence and farthings).
3. It must be portable.
4. It must be numeraire: This means that goods and services can be valued easily in one term of measurement.
5. It must serve as a medium of exchange. Other people have to be willing to take it for goods and services, and in turn it is generally accepted for that purpose.

As such it would make more sense in a situation where the US Dollar ceases to exist to keep small copper (cents prior to 1982) and cupronickle (nickles currently) coinage in its state. Furthermore, the existance of bullion coins break your theses that people would melt the coins to get the silver. American Silver Eagles have a face value of 1 dollar but contain a troy ounce of fine silver (.999 purity) which is closer to 16 dollars in value.

Why would one not melt down those coins? Simple. When metal is in the form of a coin everyone knows its weight, its purity, its value.

Quote:  Since the ratio of silver to gold tended to rise over time, under a gold standard this would likely remain the case.

Not always. Britain went to a gold standard because the ratio of gold to silver fell and gold was pushing silver out circulation.

Quote:  As I wrote this was the crux of the issue the free silver folks had.  The gold standard was flawed because the supply of gold rose too slowly, since silver grew more rapidly it was preferred to gold for a growing economy.

No the free silver crowd wanted to inflate the economy with silver. It just so happened that a large deposit of silver had been recently discovered. Ever hear of the Comstock Lode?

Quote:  The too-restrictive gold standard penalized productive folks to the benefit of rentiers.  On the other side the bankers were opposed to a silver standard because they (rightly) saw it as inflationary, and so bad for holders of money, stocks* and bonds.

Not quite true. Productive folks have never had a problem with deflationary pressures. If anything deflation assists in the accumulation of capital as liquid money appreciates in value over time. The problems with deflation arise with those who are indebted to others. Debtors always seek to borrow gold (or silver) and pay back with paper whenever they can. It is their class interest as debtors.

Quote:*Until 1916 stocks were priced like bonds, and thought to be no different than the perpetual bonds (e.g. British Consols) developed in the 18th century that had been called government "stock".

Totally irrelevant.
It really is all mathematics.

Turn on to Daddy, Tune in to Nationalism, Drop out of UN/NATO/WTO/TPP/NAFTA/CAFTA Globalism.
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#70
(06-03-2016, 08:57 PM)Kinser79 Wrote:
(06-02-2016, 10:01 AM)Mikebert Wrote: [Kinser]When the Dollar was defined as 3/4ths of a troy ounce of silver the dollar was worth exactly that.

No.  It was a GOLD standard, not a silver standard.  Didn't you even look at the link I gave?

I did, and yes there was a gold standard in place. The existence of the gold standard at the time is irrelevant, again you're seeing trees but not the forest.  That is a common problem for you, actually.  However, silver coinage has traditionally held the amount of silver that was worth the value of the coin, minus alloying for wear (which is expected and not general debasement).

A gold standard forces the stability of the money supply (unless new gold enters the supply) unless a country gets huge influxes of wealth. It has also preserved the mercantilist concern for balance-of-payments. If no new gold enters the economy under a gold standard, then both population growth and increases in productivity can prove deflationary.

 
Quote:The value of the silver in a silver dollar was LESS than a dollar.  It had to be so, or people would have melted down to coins to get the silver.


Quote:Actually no they wouldn't.  It is the same reason that people wouldn't melt down pre 1982 pennies to get the copper after a economic collapse and the use of those copper coins as a medium of exchange in the absence of other, better coins.  The reason is rather simple, a lump of silver of an undetermined purity is not fungible whereas a coin with the likeness of a ruler is known and fungible.

Money whether it is representational (IE paper and token coinage convertable into gold and/or silver) or otherwise must have various properties.

1.  It must be a store of value.  (That is why bananas are not money...they rot rather quickly)
2.  It must be easily divisible.  (in olden times silver pennies would be cut on a cross to make halfpence and farthings).
3.  It must be portable.
4.  It must be numeraire:  This means that goods and services can be valued easily in one term of measurement.
5.  It must serve as a medium of exchange.  Other people have to be willing to take it for goods and services, and in turn it is generally accepted for that purpose.

As such it would make more sense in a situation where the US Dollar ceases to exist to keep small copper (cents prior to 1982) and cupronickle (nickles currently) coinage in its state.  Furthermore, the existance of bullion coins break your theses that people would melt the coins to get the silver.  American Silver Eagles have a face value of 1 dollar but contain a troy ounce of fine silver (.999 purity) which is closer to 16 dollars in value.

Why would one not melt down those coins?  Simple.  When metal is in the form of a coin everyone knows its weight, its purity, its value.


Yes -- people like their specie in easily-identified forms (coin, cash, and numbers in a bank account). Coins have the advantage over raw bullion   due to standardization. Any deviation from that standard is easily detected. Thus counterfeits are detected easily. If the "gold" coin dissolves in sulfuric acid, then it is not gold. Even the clipping of coins for their silver or gold content is easily deterred by milling. Governments are the only entities that make really-good coins at modest cost other than the coinage metal itself. It's possible to make expensive medals or private coins, but making good counterfeits is out of the range of anyone's skills. Governments strike coins; counterfeiters cast theirs, and that difference is easy to detect.

An interesting material recently synthesized, titanium nitride, has a gold-like color... and it is useful as a tool material due to its hardness. It would be difficult to turn into a coin, but it might be an attractive coating.



[Image: 220px-TiNCoatedPunches_NanoShieldPVD_Thailand.JPG]

It's fairly resistant to chemical attack, but its hardness would be a dead giveaway on a 'gold' coin. Gold is soft. (I saw some 'gold' drill bits and questioned why anyone would plate a drill bit in gold; the gold would wear away. The coating is of titanium nitride, which does not wear away easily.




Quote:
Quote:  Since the ratio of silver to gold tended to rise over time, under a gold standard this would likely remain the case.

Not always.  Britain went to a gold standard because the ratio of gold to silver fell and gold was pushing silver out circulation.

Silver and gold are available in proportional quantities most of the time. Gold often comes out of copper and iron mines as a trace element that can usually be separated profitably. But this said, the once-profitable copper mines of Michigan produced no gold or silver, and the South African gold mines generally do not produce silver or copper.


Quote:  As I wrote this was the crux of the issue the free silver folks had.  The gold standard was flawed because the supply of gold rose too slowly, since silver grew more rapidly it was preferred to gold for a growing economy.

No the free silver crowd wanted to inflate the economy with silver.  It just so happened that a large deposit of silver had been recently discovered.  Ever hear of the Comstock Lode?
 
They also wanted to undo the deflationary tendencies that gave America the worst economic meltdown between the Civil War and the Great Depression. Deflation was hurting debtors badly and was limiting opportunities for people to get out of debt. Creditors associated with the gold standard often paid their workers iso little that they had to get their kids out of school and into the mines and factories to supplement the meager incomes of honest toil.

Quote:
Quote:  The too-restrictive gold standard penalized productive folks to the benefit of rentiers.  On the other side the bankers were opposed to a silver standard because they (rightly) saw it as inflationary, and so bad for holders of money, stocks* and bonds.

Not quite true.  Productive folks have never had a problem with deflationary pressures. If anything deflation assists in the accumulation of capital as liquid money appreciates in value over time. The problems with deflation arise with those who are indebted to others.  Debtors always seek to borrow gold (or silver) and pay back with paper whenever they can.  It is their class interest as debtors.


The class interest of debtors is to make their debts sting less and pay the debts off cheaply. The class interest
of creditors is to make debt as painful as possible and to use it as a tool of transforming a debt into peonage. When creditors get the chance they turn debtors into serfs and take away any all but the most heroic means of escape from bondage that even becomes hereditary. 

People are wise to avoid taking on pointless debt -- it is OK if it has a durable or productive asset behind it or can tap into some income stream. If it is for sustenance, then such suggests the depravity of the system. Better the welfare state than peonage -- unless one seeks to make people into peons.

Quote:*Until 1916 stocks were priced like bonds, and thought to be no different than the perpetual bonds (e.g. British Consols) developed in the 18th century that had been called government "stock".

Totally irrelevant.[/quote]

Concurrence. Preferred stock had bond-like features )it would get dividends first)  but only to a limit. Common stock has been the norm because few people want to invest in an entity with limited potential for growth.
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.


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#71
[Kinser] Productive folks have never had a problem with deflationary pressures. If anything deflation assists in the accumulation of capital as liquid money appreciates in value over time. The problems with deflation arise with those who are indebted to others.
[Mike] Farmers and businesses were net debtors.
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#72
[Kinser] I did…(look at the article)
[Mike] I went back to look at the article myself and I couldn’t find it.  I had found a 1916 report that had a nice little table in which they gave the market price for silver and the value of 371.25 grains of silver, which showed fluctuations in value with changes the price of silver over the 1882-1916 period, but all were less than $1. I somehow must have deleted the part of the post that referenced this article.  I neglected to bookmark it and cannot find it now. 

So here is a link that makes the same point. Here is the relevant section:
Between 1878 and 1900, silver was used as money in its own right in the form of the silver dollar. However, unlike the silver dollar before 1873, which was commodity money, the silver dollar between 1878 and 1900 was fiat money. Congress and the Secretary of the Treasury decided how many silver dollars to issue. Moreover, the value of silver in a silver dollar was less than its monetary value.
 
Here’s another link that covers the later period.
Substantial “backing” of paper money by gold is also both unnecessary and insufficient to make such paper “as good as gold. ”For that, what’s usually required is unrestricted convertibility of paper money into gold coin, for which fractional gold reserves not only may suffice but in practice usually have sufficed. Thus “silver certificates” issued by the U.S. Treasury between 1878 and 1933, though “backed” by silver, were worth their nominal value not in the silver for which they were exchanged (the market value of which was well below its then inoperative mint value) but in gold, thanks to the limited number of certificates issued and (after 1890) to their being redeemable for gold
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#73
(06-04-2016, 09:53 AM)Mikebert Wrote: [Kinser] I did…(look at the article)
[Mike] I went back to look at the article myself and I couldn’t find it.  I had found a 1916 report that had a nice little table in which they gave the market price for silver and the value of 371.25 grains of silver, which showed fluctuations in value with changes the price of silver over the 1882-1916 period, but all were less than $1. I somehow must have deleted the part of the post that referenced this article.  I neglected to bookmark it and cannot find it now. 

So here is a link that makes the same point. Here is the relevant section:
Between 1878 and 1900, silver was used as money in its own right in the form of the silver dollar. However, unlike the silver dollar before 1873, which was commodity money, the silver dollar between 1878 and 1900 was fiat money. Congress and the Secretary of the Treasury decided how many silver dollars to issue. Moreover, the value of silver in a silver dollar was less than its monetary value.
 
Here’s another link that covers the later period.
Substantial “backing” of paper money by gold is also both unnecessary and insufficient to make such paper “as good as gold. ”For that, what’s usually required is unrestricted convertibility of paper money into gold coin, for which fractional gold reserves not only may suffice but in practice usually have sufficed. Thus “silver certificates” issued by the U.S. Treasury between 1878 and 1933, though “backed” by silver, were worth their nominal value not in the silver for which they were exchanged (the market value of which was well below its then inoperative mint value) but in gold, thanks to the limited number of certificates issued and (after 1890) to their being redeemable for gold

As usual, the value of any currency is what one can buy with it (ignoring numismatic value). The South Korean won is useful. The North Korean currency is worthless.

The real backing of the US dollar in 1900 was American farm output, steel, machinery, etc.

The US minted so-called trade dollars that have a checkered history:

The United States trade dollar was a dollar coin minted by the United States Mint to compete with other large silver trade coins that were already popular in East Asia. The idea first came about in the 1860s, when the price of silver began to decline due to increased mining efforts in the western United States. A bill providing in part for the issuance of the trade dollar was eventually put before Congress, where it was approved and later signed into law as the Coinage Act of 1873. The act made trade dollars legal tender up to five dollars. A number of designs were considered for the trade dollar, and an obverse and reverse created by William Barber were selected.

The coins were first struck in 1873, and most of the production was sent to China. Eventually, bullion producers began converting large amounts of silver into trade dollars, causing the coins to make their way into American commercial channels. This caused frustration among those to whom they were given in payment, as the coins were largely maligned and traded for less than one dollar each. In response to their wide distribution in American commerce, the coins were officially demonetized in 1876, but continued to circulate. Production of business strikes ended in 1878, though the mintage of proof coins officially continued until 1883. The trade dollar was re-monetized when the Coinage Act of 1965 was signed into law.

https://en.wikipedia.org/wiki/Trade_doll...es_coin%29
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.


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#74
Quote:I have always found it interesting that those who are so public about supporting the poor will not recognize the harm that inflation does. Then again, a commodity money would limit government spending and it is inconceivable that anyone would want to starve the god of liberals and progressives. It is more important to them then any consequences to the poor.


But what good is the fact that apples cost a nickel if you don't have the nickel?

Go back to the K-Summer from which you so obviously came.
"It was better with them that were slain by the sword, than with them that died with hunger, for these pined away being consumed for want of the fruits of the earth" - Lamentations 4:9
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#75
(06-21-2016, 07:23 AM)Anthony Wrote:
Quote:I have always found it interesting that those who are so public about supporting the poor will not recognize the harm that inflation does.  Then again, a commodity money would limit government spending and it is inconceivable that anyone would want to starve the god of liberals and progressives.  It is more important to them then any consequences to the poor.


But what good is the fact that apples cost a nickel if you don't have the nickel?

What good is a nickel if it is worthless?  Come to think of it what good is a dollar if it is worthless as well?  Now the rich compensate by first getting the government to spend the newly printed money on them.  Second, they own tangible as well as financial assets that tend to go up in terms of nominal price.  Anyone who is holding the currency as savings, particularly while interest rates are artificially low, is going to lose.  The poor usually don't know much about these kind of investments and it is kind of hard to save up for them when inflation is eating your seed capital.

I started without a bean to my name so I know what I am talking about here.
Democracy is the theory that the common people know what they want, and deserve to get it good and hard. -- H.L. Mencken

If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action.   -- Ludwig von Mises
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#76
(06-22-2016, 02:48 AM)Galen Wrote:
(06-21-2016, 07:23 AM)Anthony Wrote:
Quote:I have always found it interesting that those who are so public about supporting the poor will not recognize the harm that inflation does.  Then again, a commodity money would limit government spending and it is inconceivable that anyone would want to starve the god of liberals and progressives.  It is more important to them then any consequences to the poor.


But what good is the fact that apples cost a nickel if you don't have the nickel?

What good is a nickel if it is worthless?  Come to think of it what good is a dollar if it is worthless as well?  Now the rich compensate by first getting the government to spend the newly printed money on them.  Second, they own tangible as well as financial assets that tend to go up in terms of nominal price.  Anyone who is holding the currency as savings, particularly while interest rates are artificially low, is going to lose.  The poor usually don't know much about these kind of investments and it is kind of hard to save up for them when inflation is eating your seed capital.

I started without a bean to my name so I know what I am talking about here.

...and what good is a mill (a thousandth of a dollar) if it too is worthless or simply impractical to use? The USA has never issued 'mill' coins. It issued fractional (half) cents in the mid-19th century, but that is as low as it went.

The cent could easily be demonetized in practice by (1) not issuing it and (2) withdrawing cent coins in circulation. Canada is doing so with its cent coins.

Nothing enforces astute handling of money as does, paradoxically, its lack. People who suddenly get large amounts of cash after being short of it often waste money on egregious expenditures; just look at lottery winners as a group and heirs who have recently had money problems. Buying or building a dream house is dumb. Buying the most expensive car on the lot is dumb. Buying expensive gifts to impress distant relatives is dumb. On the other hand, peasants and shoe-string businessmen are famous for watching expenditures closely not only in the business itself but in personal life. Buy some better farm equipment or go on a cruise? Install labor-saving equipment in the restaurant or buy an expensive car? Living above one's means is a bad idea.

The fault to day is that despite our marvels of productivity we have so much poverty, the result of market power of employers over employees. We have done well in creating more work while keeping the work paid badly. We have found excellent means of imposing new costs upon poor people so that they pay more for the same stuff.
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.


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#77
I think we need massive deflation. That's the only thing that will bring prices back to normal. If there's massive pay increases, people will use that to justify making the prices higher. It's harder to justify massively lowering the wages in deflation.
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#78
(07-19-2016, 10:36 AM)disasterzone Wrote: I think we need massive deflation. That's the only thing that will bring prices back to normal. If there's massive pay increases, people will use that to justify making the prices higher. It's harder to justify massively lowering the wages in deflation.

Deflation ravages debtors. Cut prices and wages by 90% and you will magnify the burden of debt by 10 times.

You might also find a pre-revolutionary situation. People with no hope except the overthrow of their creditors will be vulnerable to any extremist appeal that promises to lighten their burdens.
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.


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