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Thoughts? Gold Valued In Fiat, So Fiat Devalued?

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http://rt.com/op-edge/world-gold-standard-currency-152/

Thoughts? Gold valued in FIAT, so FIAT is devalued? What for Gold and Assets valued in FIAT? There value must fall? As FIAT is backed by work effort in reward for services carried out? Labour costs fall, FIAT is printed to infinity, how can asset values sustain previous valuations in FIAT? If FIAT is being devalued, values of assets are being devalued, and so is the effort you put in to perform a task or service in return for FIAT being devalued. No one is getting richer, we are all getting poorer.......All.

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http://rt.com/op-edge/world-gold-standard-currency-152/

Thoughts? Gold valued in FIAT, so FIAT is devalued? What for Gold and Assets valued in FIAT? There value must fall? As FIAT is backed by work effort in reward for services carried out? Labour costs fall, FIAT is printed to infinity, how can asset values sustain previous valuations in FIAT? If FIAT is being devalued, values of assets are being devalued, and so is the effort you put in to perform a task or service in return for FIAT being devalued. No one is getting richer, we are all getting poorer.......All.

You are seeing the valuations presented by the following conflict:

http://research.stlouisfed.org/fred2/data/M2V_Max_630_378.png

vs.

http://research.stlouisfed.org/fred2/data/BOGMBASE_Max_630_378.png

Velocity can increase willy-nilly but the Fed's balance sheet can only decrease by either the Fed selling bonds into the market (more than a taper, this is a decrease in the balance sheet!) OR the Fed holding onto it's portfolio until the bonds mature (various maturities, up to 30 years).

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By your work value of money analogy - the value of all our money is going to rise because of automation and robots. Depends then whether we can print as much as output increases.

When it comes to stuff that can be automated or that depends on technology, the same amount of money should buy you more over time. That is certainly true for constantly evolving products like electronic goods (e.g. Computers, smartphones&tablets, TVs) where you do indeed get a LOT more for your money than you did say 10 years ago.

Doesn't seem to have stopped anyone buying them though, which is what the inflation cheerleaders cite as a reason to have inflation.

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When it comes to stuff that can be automated or that depends on technology, the same amount of money should buy you more over time. That is certainly true for constantly evolving products like electronic goods (e.g. Computers, smartphones&tablets, TVs) where you do indeed get a LOT more for your money than you did say 10 years ago.

Doesn't seem to have stopped anyone buying them though, which is what the inflation cheerleaders cite as a reason to have inflation.

Not sure if it is me getting old (35), but I observe the rate that technology has been improving productivity over the last 10 years has been slowing and has now even stopped.

For example in 2003 I could buy a windows XP computer which could do about the same as my windows 7 PC does now.

In 2003 I had the internet, yes the net has improved lots.

In 2003 we had email

In 2003 we could pirate films, perhaps a little slower than today (depends where you live)

In 2003 I had a PDA and a O2 Xda II smartphone..

etc.

Today we have distractions such as Youtube and Facebook which are a drag on productivity.

The amount of time I see wasted with people at work browsing the net and posting on forums like this, facebook (me included).

The only countries to gain from the productivity are those labor intensive ones in the BRIC economies.

and that my friends is one of the reasons real wages are falling.

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By your work value of money analogy - the value of all our money is going to rise because of automation and robots. Depends then whether we can print as much as output increases.

You say that like it is a bad thing...

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Not sure if it is me getting old (35), but I observe the rate that technology has been improving productivity over the last 10 years has been slowing and has now even stopped.

For example in 2003 I could buy a windows XP computer which could do about the same as my windows 7 PC does now.

In 2003 I had the internet, yes the net has improved lots.

In 2003 we had email

In 2003 we could pirate films, perhaps a little slower than today (depends where you live)

In 2003 I had a PDA and a O2 Xda II smartphone..

etc.

Today we have distractions such as Youtube and Facebook which are a drag on productivity.

The amount of time I see wasted with people at work browsing the net and posting on forums like this, facebook (me included).

The only countries to gain from the productivity are those labor intensive ones in the BRIC economies.

and that my friends is one of the reasons real wages are falling.

Smart phones have come a long way, as have tablets. In 2003, even budget laptops were an order of magnitude more expensive than now.

In 2003, broadband was pretty much 512kbit and now you can have 10mbit+.

Youtube is allows anyone to broadcast high quality videos to anyone who cares to watch them. This is massive progress.

I agree that Windows hasn't progressed much since XP, but Linux offers more than XP did and arguably (depending on what you use it for) more than Windows 7/8 does now. Even my telly has Linux on it now.

As I work a lot remotely, Skype, join.me (shame there is no Linux client, mind), Google Docs etc have enabled me to do things that I just couldn't do without going into an office in 2003.

Crowd funding is starting to change the way projects are funded and technology like Bitcoin has a chance of completely changing the way we think about money too.

Personally, I'm regularly astonished at the speed of progress in technology, despite the state doing everything it can to prevent it (copyright, patents, regulations etc).

Edited by Traktion

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http://rt.com/op-edge/world-gold-standard-currency-152/

Thoughts? Gold valued in FIAT, so FIAT is devalued? What for Gold and Assets valued in FIAT? There value must fall? As FIAT is backed by work effort in reward for services carried out? Labour costs fall, FIAT is printed to infinity, how can asset values sustain previous valuations in FIAT? If FIAT is being devalued, values of assets are being devalued, and so is the effort you put in to perform a task or service in return for FIAT being devalued. No one is getting richer, we are all getting poorer.......All.

We've certainly always been on a commodity standard, whether gold is involved or not. When they start the presses running, there is nothing they can do to stop the price of stuff reflecting this.

Also, not everyone is getting poorer. Those who have lots of stuff and don't need to work are doing very nicely out of it, i.e. the very wealthy. Inflation always results in the rich getting richer, with the poor getting poorer.

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Not sure if it is me getting old (35), but I observe the rate that technology has been improving productivity over the last 10 years has been slowing and has now even stopped.

For example in 2003 I could buy a windows XP computer which could do about the same as my windows 7 PC does now.

In 2003 I had the internet, yes the net has improved lots.

In 2003 we had email

In 2003 we could pirate films, perhaps a little slower than today (depends where you live)

In 2003 I had a PDA and a O2 Xda II smartphone..

etc.

Today we have distractions such as Youtube and Facebook which are a drag on productivity.

The amount of time I see wasted with people at work browsing the net and posting on forums like this, facebook (me included).

The only countries to gain from the productivity are those labor intensive ones in the BRIC economies.

and that my friends is one of the reasons real wages are falling.

The rate of technological change peaked in 1998 and has been declining unevenly ever since. Japan, for instance, once in the vanguard of that change looks like becoming a post-industrial backwater as it hollows out and defaults.

The guitarist Al di Meola recently suggested that it was harder to create music today than back in the day since in addition to the usual lifestyle distractions everybody was constantly checking for texts and emails rather than concentrating on the business in hand. Add to that the fact that musicians don't get paid anymore means there's little incentive for new ideas despite the huge advances in cost and sophistication that digital recording has brought.

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Doesn't seem to have stopped anyone buying them though, which is what the inflation cheerleaders cite as a reason to have inflation.

Indeed, in reality the average western consumer wont sit on piles of cash when it buys them ever more gadgetry with each passing day. The only aspect of the inflationists mantra that has any validity is the idea that its useful to drip feed some small amount of surplus cash into circulation to buy up the output of increased productivity. The problem is that the banks get to create this additional money rather than the new money being a "commons asset".

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Indeed, in reality the average western consumer wont sit on piles of cash when it buys them ever more gadgetry with each passing day.

The thing is this is very small beer compared to housing. I've got a smart phone that cost me £74 If I add everything up I have probably spent less than £500 pound in the last 5 years. less than most people pay in mortgage or rent in a month.

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By your work value of money analogy - the value of all our money is going to rise because of automation and robots. Depends then whether we can print as much as output increases.

The interesting thing about this, is that it all depends on whether you are the owner of the robots, or one of the people put out of work by the robots.

The gap between rich and poor is increased.

But then, the same problem occured when the powered loom was invented.

i am not a Luddite. The problem is not that goods and services can be produced by fewer people, it is that the benefits are not fairly shared.

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Exactly, that is my point. Greater efficiency should mean lower prices, more purchasing power and higher gdp (flawed, but let's say 'output that is bought').

Unfortunately land is the great sink where all these gains end up. If people have more money left over because things are cheaper, then people will be willing to borrow more to compete for their plot where a shortage exists (which because of the limiting geometric nature of towns and cities, is nearly always the case). Ditto, increases in salaries, more workers (wives, immigrants), lower taxes etc etc

Not at all. Progress should be about making us all wealthier and happier. I sense this is not the case.

Deflation of prices is only a problem in a debt based monetary system.

i think its pretty clear that its not land where it ends up, rather it is force where it ends up, the 3 pillars of rentierism is where it has ended up, the state monoply, fiat monopoly and land monopoly

These are all functions of violently imposed scarcity by the daddy of them all , the state

Theres been no need for it to happen, its a straightforward function of theft/taxation and where it is imposed, i dont think its any great mystery that wealth was redistrubuted more equally half a century ago by the special flowers known as the state when 90% of the population happened to be handy with rifles, now 90% of the popn are handy with joypads, mehhh, we reap what we sow

Once they feel threatened enough again, there will be more equal redistribution

Edited by Maria Gorska

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The interesting thing about this, is that it all depends on whether you are the owner of the robots, or one of the people put out of work by the robots.

The gap between rich and poor is increased.

But then, the same problem occured when the powered loom was invented.

i am not a Luddite. The problem is not that goods and services can be produced by fewer people, it is that the benefits are not fairly shared.

The PC and the Web are as much a product of the thirty year debt Ponzi as our stratospheric housing costs. Technology's rate of change would have been far slower without the $600trn shadow banking system and far easier to accommodate in political and social terms. Moore's Law is a banking construct first and foremost.

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good post

Reminds me of this:

t6frea.jpg

id only argue that that diagram is blatantly not capitalism as in what many people believe capitalism to be, you would get an identical structure under communism, what it actually depicts is violence, it is the hierarchy of violence, it can be dressed up with any propoganda left,right,centre that anyone likes but it is undoubtedly the inevitable result of violence

Its basically Dantes inferno that we seem doomed to live with no matter how many Virgils and Beatrices we want to aspire to to ignore the violence

Edited by Maria Gorska

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