if our currency was backed by gold it would be inflation resistant.
The prabability of our currency surviving through a political calapse is very low.
Your arguement is still very weak
And the fed controlls how much money is made, they determine the supply, the people do not. If you have a trillion of something then it is less valuble then if you had a thousand of something. Being that people don't ment their own money they dont have the ability to control supply, the fed dose. How on earth do people control the value of a dollar without controlling supply
http://www.nytimes.com/2012/06/19/business/global/daily-euro-zone-watch.html?_r=1&pagewanted=all
Some relief for the Greece nation but is it still something that they will need to look at again within a few months or sooner? Receiving bailouts will only do so much before the rest of the country collapses.
I said relatively stable. And that 2% is probably the most stable we'll ever realistically get so I'll take it.
Clax and I have got way off topic, but yes I think the bailout buys some time but Greece will leave either way.
The Fed controls supply to counter changing velocity (which the market controls- demand for money). MV=PY
You know what? There are people who spend their whole lives studying these things. There is a large body of academic work studying these matters. And you not only do not know even the simplest facts we have gotten through that, but you vehemently oppose what all of that work says. And then you call my argument based on it weak. I don't know what you are trying to say here, is it that all of acedemia is part of some huge conspiracy? Well I'll tell you the answer is no and if you still want to believe it then I don't care. You have failed to understand the simplest concepts of money yet you think my argument is weak. My argument is the argument that everyone who matters understands even if they might not agree with it. You don't even understand my argument yet. I think I am done here. I suggest you read more about monetary theory and policy, you just do not understand even the basic points of it and I am tired of saying the same things over and over again. No disrespect intended, I think you are a nice guy and I thank you for the respectful and polite debate.
You talk out of both sides of your mouth, and you deny human nature, you dont understand simple concepts, like 50 being the same number as 50. You way over generalize and you put way to much into so called "academia" when academia says things against history, it is almost always wrong.
I have shown you more graphs that show that not only are you mistaken but you are dead wrong.
If you have a dollar, and you control the value than change it out for 100 dollars.
I am not going to argue about this, but I will prove that you do not yet understand my argument (and hence are not in a position to bash it as you do):
1- You still do not understand real vs. nominal, hence your issues with the first graph I posted
2- You do not understand MV=PY and how velocity matters
3- You continue to neglect the short term and pretend that people only use money once ever 100 or so years because you just compare long-term values.
If you can explain to me #1 and #2, I will continue this debate if you wish. But if you still don't understand what real vs nominal and MV=PY means after all that I've explained, I suggest you pick up a textbook.
On a side note, I hope you realize that even the people who advocate hard currency in academia understand MV=PY and real vs. nominal terms and they have different reasons for why they support a gold currency or whatever (such as gold volatility would go down if it was used as currency). So ironically, even the notable figures who advocate gold currency would not agree with your arguments.
You still have no idea, your graph shows gold next to comodities, i used several comodities as a basis for my argument and you were not understanding. You said milk, cars, anything i used as an exaple were subject to supply and demand. All commodities are subject to supply and demand. So your graph is flawed. Unless there is a comodity
That is not.
2% intrest compunded every year is exponitial decline, on a graph it would be represented as a parobolic curve, reaching infinity eventually people will not use the dollar. Because the worth of it or it's buying power will be on the parobolic curve approching zero. This is highschool level math. Gold dose not do that because it can not inflate because you can't make more.
It is gold vs. the real USD. There are 2 lines, I don't see how you keep denying that especially after acknowledging it.
Did I ever say it is not exponential? My whole point here is, so what? I am done though. You accuse me of high school level mistakes, but everyone can see who knows what they are talking about here. (also you called me condescending before- what do you think your "high school" remark is?)
The gold-USD line is fluctuating a lot- that is the problem. The other line doesn't even matter in this debate. You still don't understand the graph though, so you can keep telling yourself you are right or admit to yourself that you don't understand the graph and the point I am making and try to learn how to interpret that graph (you don't even have to say it to me because frankly I don't care but you should want to do it for yourself)
Depends how you define stability. Either way it is less volatile than gold would probably be especially because you can't counter changes in V with changes in M (at least not as easily and you hit a wall pretty quickly even when you can- although with your plan you probably wouldn't want those changes in M either since you think the central bank inflates because it likes to).
It is all relative. Perfect stability (0% inflation) is not possible, especially in the short run when it matters.
The dollars don't matter! You still don't know what real means.
Because it is a reference point that is neutralized by adjusting for inflation- hence why we call it the REAL price of gold.
It is impossible with any currency period. Including gold*
A small correction in my argument (because I am not afraid to admit I am wrong when I am wrong): inflation targeting was not used until the early 1990s- prior to that we targeted exchange rates and before that money supply (M). All post-Bretton Woods of course. This leaves my argument and its validity unchanged, but I just wanted to offer my correction.
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