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Does anyone here use Bitcoins?
tomos:
So, if it cost $0.05 to buy a loaf of bread 100 years ago (when the standard of living was lower), and today it costs $5.00 (with a higher standard of living), then, when a loaf of bread costs $500.00 then what?
-Renegade (October 22, 2013, 08:44 PM)
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I dont really care what something costs in comparision to x years ago (maybe I should) - I care what it costs in relation to what I can earn/make in an hour/day/week/month/year. That's my point when I ask "can you seperate the "value" of e.g. the dollar from the standard of living?".
Renegade:
So, if it cost $0.05 to buy a loaf of bread 100 years ago (when the standard of living was lower), and today it costs $5.00 (with a higher standard of living), then, when a loaf of bread costs $500.00 then what?
-Renegade (October 22, 2013, 08:44 PM)
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I dont really care what something costs in comparision to x years ago (maybe I should) - I care what it costs in relation to what I can earn/make in an hour/day/week/month/year. That's my point when I ask "can you seperate the "value" of e.g. the dollar from the standard of living?".
-tomos (October 23, 2013, 01:31 AM)
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Ah. Gotcha. I know what you mean now.
http://www.infoplease.com/ipa/A0774473.html
Minimum wage workers in 1964 made about 30% more than minimum wage earners now. *IF* you look at fiat, only.
Minimum wage for 1 hour in quarters in 1964 was about 0.82 troy ounces of silver.
http://www.kitcosilver.com/charts.html
Today that's worth more than $18.50. (@ $22.60 per ozt)
Somebody... please tell me that you'd rather have $4.87 worth of purchasing power than $18.50 worth of purchasing power. Do it with a straight face. Anyone? Anybody?
<crickets />
Please keep in mind that the current value of silver has been manipulated to be artificially lower, with the greatest manipulator being JP Morgan, who is facing $13 billion in fines to start with, as well as pending criminal charges. (Goldman Sachs stays more on the gold market manipulation side...) They are manipulating precious metal prices through ETFs (Exchange Traded Funds). These are not backed up by physical metals. Resolution is done in $$$ instead of through physical delivery. The ETF markets are used to manipulate the physical markets. You can see this in the large spike in physical premiums we had a few months ago when GS & JPM along with their central banking buddies assassinated gold & silver. (There are other price manipulations going on, e.g. copper, but what I've got there should be enough. Please do go out and fact check me if you don't believe me.)
So that $18.50 number is extremely conservative.
When did Classical Greece fall? After it had debased its currency.
When did Rome fall? After it had debased its currency.
When will we fall? ;)
Now, for "standards of living", we cannot conflate "available gadgets" with the standard of living. The things to look at are life expectancy, home ownership, available leisure time, number of working parents in a family, etc. Not how many people have a big screen TV and gaming console. But... That gets into a very long discussion and I'm simply too lazy to do the research to post links here.
...
But, no matter how you cut it, debasing a currency is not a good thing. I utterly fail to understand how people can think that it is.
tomos:
^I'm not arguing about debasing of a currency, and whether that might be a good thing. (1) I dont want to argue it (2) I'm not qualified to do it anyway ;-)
Minimum wage workers in 1964 made about 30% more than minimum wage earners now. *IF* you look at fiat, only.
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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]. 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).
Minimum wage for 1 hour in quarters in 1964 was about 0.82 troy ounces of silver.
[...]
Today that's worth more than $18.50. (@ $22.60 per ozt)
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Why do I feel like I'm being cheated when you compare minimum wage in 1964 and today in terms of silver :-\
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. 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...
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 ;)
Renegade:
@Tomos - Dammit! You're making work harder here! ;) ;D (I understand many of these things far above my ability to explain/teach on the topic.)
http://www.minneapolisfed.org/community_education/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].
-tomos (October 23, 2013, 06:53 AM)
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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).
-tomos (October 23, 2013, 06:53 AM)
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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 :-\
-tomos (October 23, 2013, 06:53 AM)
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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.
-tomos (October 23, 2013, 06:53 AM)
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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...
-tomos (October 23, 2013, 06:53 AM)
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WHOA THERE~!~!~!~!
Ok, this part:
if money was related to, say, silver...
-tomos (October 23, 2013, 06:53 AM)
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Good so far...
...and silver was increasing in value all the time...
-tomos (October 23, 2013, 06:53 AM)
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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.
This:
"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! 8)
...then wages would probably have to be reduced proportionately, otherwise companies would go bust.
-tomos (October 23, 2013, 06:53 AM)
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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 ;)
-tomos (October 23, 2013, 06:53 AM)
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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. :)
tomos:
^ thanks for taking the time to make that response Ren :up:
I do understand better now where you're coming from. I also understand a bit better your focus on inflation (which btw is still way down my list of problems - personal or theoretical :-\ unless it is a symptom of something unhelpful, which of course it might well be).
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