@Tomos - Dammit! You're making work harder here!
(I understand many of these things far above my ability to explain/teach on the topic.) http://www.minneapolisfed...teacher/calc/hist1800.cfm
Cumulative inflation from 1800~1899: -0.547%
Cumulative inflation from 1900~1999: +315.70%
Cumulative inflation from 2000~2013: +34.30%
For comparison - first 13 years of each century:
Cumulative inflation from 1800~1813: +15.80% <--- War of 1812 is 14.7% here.
Cumulative inflation from 1900~1913: +17.60%
Cumulative inflation from 2000~2013: +34.30%
In the 1900s, the first 13 years represent 5.6% of the inflation for the century.
Keep in mind that I'm using Federal Reserve Bank numbers there. I think this kind of sort of maybe puts my claim there out of the "skewed" category. I'm taking numbers out of the enemy's camp.
Now, to go back further... sigh... too lazy to look that up now. I've seen the numbers before, but don't remember where at the moment. Anyways, moving on and skipping the 1700s...
I was thinking more in term of a comparision with 1800 or even 1900 (referencing your quote that money had lost so much value in the last 2 to 300 years). It's easy to cherry pick a very short period of time when average people did reasonably well, and say that's what the world would be like if [xyz].
I didn't cherry pick 1964. I picked it because 1965+ coins aren't silver; they're copper/nickel.
But I dont see much logic there, nor much to convince me of anything really. I could just as easily argue that times were good then because banks were much more regulated (and we might both be right - or wrong, or it might just be the case that there's an awful lot more going on at any time, than any simple idea/concept can explain).
Dunno what to say there.
Why do I feel like I'm being cheated when you compare minimum wage in 1964 and today in terms of silver
Not sure. Perhaps because I've pulled a fast one and compared money to currency. They're not the same. As you can see above, the US currency isn't worth much now. In 1964 it was worth something and was tied to money (silver coins).
We've touched on this before (my post in basement thread about greenback dollars
). SeraphimLabs claims a deflationary model is unstable (second post @ the link above). I dont know about his qualifications, but you didnt respond directly.
I did respond directly to most of that. I didn't go over (primarily) deflationary currency directly though. That would have taken more time than I can reasonable spare.
It can be summed up like this:https://en.wikipedia.org/wiki/Gresham's_law
People WILL spend. They MUST spend. They MUST eat. They MUST use resources to live, etc. etc.
Deflationary fears are mostly paranoia. What's wrong with people not using more than they need? Is that a bad thing? etc. etc.
To be honest, fears about deflation seem simply silly to me, and not really worth addressing any more than Hollow Earth theories or reptilian aliens - they're fun, and perhaps interesting, but not particularly useful.
As I say I'm not qualified to talk about it, but off the top of my head, if money was related to, say, silver, and silver was increasing in value all the time, then wages would probably have to be reduced proportionately, otherwise companies would go bust. Not sure that would go down too well...
Ok, this part:
if money was related to, say, silver...
Good so far...
...and silver was increasing in value all the time...
We just went off the rails.
You sound like you're buying into my trick above where I compared fiat currency to money (silver) in the inflationary context. Silver *IS* money. Currency, like the USD or EUR, is *NOT* money - it is just "currency". Perhaps I should have not slid that in there without making it explicitly clear what the actual comparisons are.
Silver doesn't increase in price like that. What happens is that the value of the currency falls.
The value for a loaf of bread doesn't really change. What changes is the value of the currency.
Same thing for eggs, milk, gasoline/petrol, whatever -- their values do not change. The value of the currency used to buy them changes.
"Oh my! Milk is $5.50 and only last month it was $4.50. Milk is getting so expensive!"
Is just WRONG.
This is more accurate:
"Oh my! Milk is $5.50 and only last month it was $4.50. The central banks are raping us with inflation that devalues the crappy currency we're using!"
Don't belive me? Hehehe! Check the first link above.
From the Fed even!
...then wages would probably have to be reduced proportionately, otherwise companies would go bust.
From what I've illustrated above, that doesn't follow.
If gold/silver were used, wages would be stable. You can look at the historical prices of silver and see very, very little fluctuation until the central banks get their clutches on the currency and debase the hell out of it. At the same time, you can also see that inflation was about zero.
e.g. In any given year a loaf of bread, stick of butter, and litre of milk will cost the same amount of silver/gold. (This has become distorted due to EFT manipulations in the last few decades, but holds for true prior to that.)
Does that make more sense now?
I know that you know a lot about the flaws in fiat money Ren. But I get the impression that you dont know a whole lot more about economics than I do, yet you seem so very sure about your ideas. That sets off alarm bells for me. No offence intended - it's the ideas I'm on about
No offence taken. I'm not really good at explaining some of these things, and I hate going back to look up references that I've forgotten.
I'm pretty certain about a few things, but my reasons are generally either for reasons of math or because I don't like looking at naked Emperors, e.g. taking perfectly good paper and ink and making them both worthless.