M3 Money Figures Flash Warning Signs

[Griptool]

the Monetary Multiplier at the St Louis Fed is below zero (0.925)

The M1 Money Multiplier is where the action is - Measuring the net effect of new money added to the monetary base. How hard each shiny new dollar is working.

Less than one = DEFLATION and no amount of hyperbolic cockwittery from the likes of Daddy Bear will change that

[porca misèria]

The actual solution is to cancel all "savings" and simultaneously cancel all "debts" because they are both a chimera.

You mean like the Khmer Rouge in 1970s Cambodia? That worked well, didn't it?

/me respects people with purist views (even if impractical) but looks suspiciously on those who apply such views inconsistently: for example, abolishing money but leaving other assets untouched.

[Traktion]

precisely

Which suggests a Chartalist system exists and is working already (especially with QE in play). Alternatively, we are moments away from collapse, as such a system cannot possibly work on trust alone.

I suppose time will tell!

[Stars]

(A true monetarist believes that money supply should be controlled so that its growth is commensurate with the economy's long term growth rate, so a declining money supply is just as dangerous as too fast monetary growth. In contrast, on HPC we have lots of amateur monetarists who have a much simpler rule: if you increase money supply, ever, under any circumstances, then the only possible consequence is hyper-inflation.)

Completely agree

And there are those, like myself, who say that money supply would naturally and effortlessly track the growth of the economy, if the only way to repay debt were by creating wealth.

Edited September 29, 2009 by Stars

[shindigger]

precisely

Either they are both money

Or neither of them are

Let me help...

Neither of them are, because they are not backed up by anything real

True money is nothing more than a stand-in, a way of universally storing one's exchange value for real stuff in the real world. Modern fiat "money", be it central bank issued or institutional lender issued is a promise to pay in nothing other than itself. In other words, it is a promise that is backed up by sweet f*ck all

All of it

Having read this post i feel the need to buy this to make the money real.

http://cgi.ebay.co.uk/2002-MASERATI-3200-GT-

GREY_W0QQitemZ110438873715QQcmdZViewItemQQptZAutomobiles_UK?hash=item19b6ab7a73&_trksid=p3286.c0.m14

[Traktion]

Who would lose more, the rich or the poor?

Which of those groups makes the rules?

What is going to happen?

Of course, the rich could pile into leveraged assets first, but thats the sort of thing that risks Bragg, and no-one wants that.

I would imagine that the rich would become poorer, the indebted would be given a life line and the neutral would be given some money to spend too. It would close the gap between the rich and poor.

I'm not saying it is an ideal solution, I'm just highlighting the option and the resulting effects really.

[Injin]

precisely

Either they are both money

Or neither of them are

Let me help...

Neither of them are, because they are not backed up by anything real

True money is nothing more than a stand-in, a way of universally storing one's exchange value for real stuff in the real world. Modern fiat "money", be it central bank issued or institutional lender issued is a promise to pay in nothing other than itself. In other words, it is a promise that is backed up by sweet f*ck all

All of it

Nope.

Money (in a market sense) is the most commonly traded item.

Base money is legally a promise but operationally acts as money.

[Guest Steve Cook]

Having read this post i feel the need to buy this to make the money real.

http://cgi.ebay.co.uk/2002-MASERATI-3200-GT-

GREY_W0QQitemZ110438873715QQcmdZViewItemQQptZAutomobiles_UK?hash=item19b6ab7a73&_trksid=p3286.c0.m14

nice

[Guest Steve Cook]

Nope.

Money (in a market sense) is the most commonly traded item.

Base money is legally a promise but operationally acts as money.

What the hell is the above suposed to mean injin

Does central bank issued fiat act in any way other than as a promise to pay in anything other than itself?

Does instituational lender issed "credit" act in any way other than merely as a promise to pay in itself and or "legal tender"?

Are either of the above backed up explicitly by any real world thing?

The answer to all of the above is no.

Which leave only the question as to why we should consider central bank issued promises that are not backed by anything other than themselves as any less of a lie than institutional lender issued promises that are not backed up by anything other than themselves or another lie that lies one level deeper.

Ther anser is we shouldn't in principle

In practice, of course, central bank lies are enforcable by a gun if necessary.

So, from the poster who constantly harps on about the evil in the world that stems from coercion, you are quite happy (and without the merest hint of irony) to stand and defend the biggest coercion of the lot......

[Injin]

What the hell is the above suposed to mean injin

Does central bank issued fiat act in any way other than as a promise to pay in anything other than itself?

Does instituational lender issed "credit" act in any way other than merely as a promise to pay in itself and or "legal tender"?

Are either of the above backed up explicitly by any real world thing?

The answer to all of the above is no.

Which leave only the question as to why we should consider central bank issued promises that are not backed by anything other than themselves as any less of a lie than institutional lender issued promises that are not backed up by anything other than themselves or another lie that lies one level deeper.

Ther anser is we shouldn't in principle

In practice, of course, central bank lies are enforcable by a gun if necessary.

So, from the poster who constantly harps on about the evil in the world that stems from coercion, you are quite happy (and without the merest hint of irony) to stand and defend the biggest coercion of the lot......

In a market, the most commonly traded item is money.

That means folding cash/coin is money.

It's also got all sorts of weird rules assoicated with it in the banking system - which has nothing to do with how the man on the street uses it.

[jonpo]

no matter, Merv can force the reserve balances to be lent by simply sending the BofE's rate (for commercial bank deposits) below zero.

yeah right.... you watch that money flee as it disapears overseas in a million carry trades.... it will all come back with interest once the currency collapses....

[Injin]

You mean like the Khmer Rouge in 1970s Cambodia? That worked well, didn't it?

/me respects people with purist views (even if impractical) but looks suspiciously on those who apply such views inconsistently: for example, abolishing money but leaving other assets untouched.

I'm not advocating abolishing money - just telling victims of fraud what's gone on.

It's cruel to leave them in the dark and uncertain, to whittle away at them over time via inflation until the penny finally drops....

[lowrentyieldmakessense(honest!)]

I'm not advocating abolishing money - just telling victims of fraud what's gone on.

It's cruel to leave them in the dark and uncertain, to whittle away at them over time via inflation until the penny finally drops....

including government ministers

[porca misèria]

Completely agree

And there are those, like myself, who say that money supply would naturally and effortlessly track the growth of the economy, if the only way to repay debt were by creating wealth.

That's a nice "if".

Now, "if" you had an idea for how to bring that about and kill off unproductive speculation, then we could have an opening for a constructive debate on the subject.

[porca misèria]

including government ministers

That's cruel, leaving us in the dark as to which idiot you're quoting

[lowrentyieldmakessense(honest!)]

That's cruel, leaving us in the dark as to which idiot you're quoting

it could be any one of them

[CokeSnortingTory]

I would argue that gold is only a mutual understanding. There is nothing behind it.

Land is the only true money. It furnishes a return each and every year and all wealth is based on land which is why if you increase 'money supply' it gravitates (did you spot that?) towards land.

Yes it's funny how the powerful families who have held most of the UK's land for centuries have managed to resist the temptation of gold, isn't it?

Goldbugs are the suckers who think they haven't been suckered like all the other suckers.

[Guest Steve Cook]

I would argue that gold is only a mutual understanding. There is nothing behind it.

Land is the only true money. It furnishes a return each and every year and all wealth is based on land which is why if you increase 'money supply' it gravitates (did you spot that?) towards land.

EDIT: And note that most money ('credit money') is simply a transportable version of land - it is collateralised against land.

And secondly - when the Weimar republic had their terrible hyperinflation. they didn't back the replacement currency with gold, they used the productive land.

I would agree with this to a degree.

My problem with modern fiat is not that it is not backed up by anything. It is that it is not backed up by anything and we are forced to use it.

If money that was lent into existence was allowed to organically extinguish in times of economic contraction along with an organic expansion in times of growth, then a kind of brutal honesty is embodied in such a system. In other words, a truly free market in money. It is the fact that such natural self-regulation is not allowed to occur that results in the wholesale theft and transference of wealth from one section of society to another via QE manipulations and that this theft is enforced, if necessary with all of the violence of the state.

The fact that injin is the prime apologist for the above system is the most hilarious irony of all.

Only with out the laughs.

As for land and gold...

As it turns out, gold, along with a number of other rare commodities has organically arisen as money in the past. Money, most certainly does not have to be in this form, of course. It just happens to fit the requirments of money wery well.

It is rare (not easily QEd)

It is stable (not easily prone to deflation due to physical degradation, stores well)

It is relatively useless ( or has been historically). This means it is not likely to suffer from deflation of monetary supply due to being used for "useful" stuff.

It is portable and so can be easily transported to locations of trade. Obviously, in todays global economic environment, this is much less true than it was previously.

all of the above has meant that gold has proved to be very effective for storing one's exchange value in and also for enacting an exchange. The same has been historically true to a lesser extent for silver and copper. As I have said, the above do not have to be the inevitable medium of money. However, history shows us that they have been independantly chosen as such on many occassions.

As for land. Yes, it is a very good store of value. However, it is not portable. Thus, it does not have the universal exchangability of something like gold. and so is not, in my opinion as good as gold for monetary purposes. Nontheless, in terms of storing one's exchange value in the most stable form possible, you can't beat land.

Edited September 29, 2009 by Steve Cook

[Injin]

I would agree with this to a degree.

My problem with modern fiat is not that it is not backed up by anything. It is that it is not backed up by anything and we are forced to use it.

If money that was lent into existence was allowed to organically extinguish in times of economic contraction along with an organic expansion in times of growth, then a kind of brutal honesty is embodied in such a system. In other words, a truly free market in money. It is the fact that such natural self-regulation is not allowed to occur that results in the wholesale theft and transference of wealth from one section of society to another via QE manipulations and that this theft is enforced, if necessary with all of the violence of the state.

The fact that injin is the prime apologist for the above system is the most hilarious irony of all.

Only with out the laughs.

[the_austrian]

M4 is a recording of promises, not money.

What is money if not a promise to pay?

[Guest Steve Cook]

What is money if not a promise to pay?

exactomuno

If the thing you posess is not a promise to pay something, but is instead something, then it is not, by definition, money

Money, is, by definition, a promise to pay

[Conrad]

Your a bull bater Mr Cook. and Injin you should come out of the closet and pronouce yourself a bull.

We live in interesting times,

I see only Daddy Bear is prepared to throw his chips on the table and he is running out of time....

[the_austrian]

Which suggests a Chartalist system exists and is working already (especially with QE in play). Alternatively, we are moments away from collapse, as such a system cannot possibly work on trust alone.

I suppose time will tell!

The Chartalist support is not sustainable because there will be no more good faith and we outnumber them, so it relies on belief in the promises. Soon people will be told (by their friends or by the internet) about what happened in 1971 when Nixon closed the Gold Window and they will lose interest in the promises.

[Injin]

exactomuno

If the thing you posess is not a promise to pay something, but is instead something, then it is not, by definition, money

Money, is, by definition, a promise to pay

In a market money is payment.

It's an item that people want for itself.

[Stars]

That's a nice "if".

Now, "if" you had an idea for how to bring that about and kill off unproductive speculation, then we could have an opening for a constructive debate on the subject.

If you narrow it down a bit, the problem becomes simpler

At root, the problem of unproductive speculation is the problem of people being paid for situations, arrangements, stuff that is not produced.

Edited September 29, 2009 by Stars