Topic: Fascinating information on saving vs. consumption (Read 4326 times)

We have a work less party here they tout the same mantra, but they too don't see the problem.
You can't force people to work less, people today need to work more to pay for the inflation caused by fractional reserve banking.  (I consume as much if I work 3 days a week as I do working 6)
If you were able to reap the benefit of labour magnified by technology, you would work less, and if you didn't you would accumulate savings which would facilitate a delayed benefit- working less.
Savings represent the accumulation of wealth.  (Wealth is all the things you need and want in abundance)  in a highly diversified economy like today with technology changing all the time it is beneficial to accumulate your wealth by saving money.  Adjusting the system with inflation forces investment and misallocation of resources and I have to work more not because I like it but because I have too.

I like cows they are used as money where I am from, people today still pay there Lobolo in cows.   

So my cows are money I have 10 cows (worth $100 each*), they represent all the cows in my village, a community with a stable population, I lend them to the bank who milks them for me in exchange for looking after them.  The bank then makes 50 paper cardboard cut ousts of cows through fractional reserve banking and introduces (spends or loans) them into my community.  By your admission the value of my cows just dropped and there was no theft.  But in reality there are still only 10 cows and the value of my cows just dropped to about $16.66. By what mechanism was the value of my cow diminished? If there are still only 10 cows (or $1000 value of cows ) in this community but mine are now only worth $16.66, (my wealth was taken without perdition?) this is by definition theft.
The theft will only be problematic when there is a drought or hard times and the 60 cows are needed. (a run on the bank due to the economy shrinking) 

FRB is like Keynesianism it requires perpetual growth to be sustained.

*while the $ is a subjective unit of measure, for this argument I will presume it is a fixed and objective unit of measure. ( a more objective unit of measure would be how many steak dinners per cow) 

I am aware of what banks should do in an honest economy, pretendo, and I am also aware that we are not a part of one.

Banks don't "steal" wealth or even reduce a society's wealth. In fact, the very phenomenon of inflation is able to be fought using savings in banks, which account for inflation in their rates. There's nothing wrong with the idea of banks, only how the current system is executed. Which is in a semi-monopolistic manner

I wholeheartedly agree with you. Without the banks stealing our wealth and productivity (or, if you listen to me, the bitcoin rich as well), there are a few scenarios I can come up with to how society might change:

1. Less hours per workweek - this has the added side benefit of making the unemployment problem much easier to handle
2. Earlier retirements as savings are easier to accumulate and do not devalue over time
3. People who are politically or altruistically motivated can work more and longer if they so choose for a seriously enhanced ability to donate to political causes and humanistic pursuits (I like the idea of an open-source pharmaceutical company as being something that could be possible)
4. As a caveat to 3), with the power of the ultra wealthy reduced, governments will be less persuaded by corporate interest lobbying groups. The people will have much more of a voice in government.
5. Uncontested megacorps will be much harder to form without the financial system being able to back these moves.


There is always a balance that can be found when the free market is allowed to function freely. When the general population is allowed to focus beyond making ends meet every month, who knows what the limitations of society could be.

Either way it does not work, since the core problem now is over-production, even people have enough money, they will not consume, since after housing there is no more desire that is so eager to fulfill.  even banks loan out the money, it will not create new projects

People should have more time to consume, we must decrease working hours, should be written into law, 4 days working week then over production will be corrected

People calling inflation or FRB theft are just making themselves looks silly. You are disservicing your arguments and the rhetoric of libertarianism by stretching the epithet of theft to places where it doesn't belong, then making legitimate complaints about taxation looks equally silly. FBR could and would exist in systems without a monopoly on currency, it would just be up to you to choose to use that current or enter into such a contract. And money supply inflation is not theft; you are not entitled to the value of anything you own, especially for a libertarian point of view. If I own 10 cows that are valued at $100 each, and someone shows upside his own 50 cows and the price drops, no theft occurred.

I'm not really sure how you've illustrated that FRB doesn't work. You've agreed at some point that it was probably key to spurring the industrial revolution. FRB did not begin by decree, you should know that, it began because of greedy goldsmiths giving out more slips of paper than gold in their vaults. But once people got wise, the goldsmith paid them interest, and modern FRB was born without any coercion from the state.

This time I will quote the post you did not reply to:


I'm just giving an "if it could happen" scenario that I don't believe is possible.


But the measure of the currency does change as more people or more value is added to the economy (or money is taken out of circulation). This is a silly argument when tied to a fixed supply of currency.

Ok I have got it.

One man with access to all the technology today is capable of providing calories for over 10,000 people, so yes we are not an agrarian economy, (not aspiring to be "growth-based economy" either) but all that means is for every 1 farmer there could be 10,000 people doing other things in the economy what should give you a metric by which to calculate the actual benefits of the division of labour.  (my point being wealth is created by ones applied labour and saving it by any means that doesn't lose value is inherent in the principal Meme that is money.   So yes I do believe we are still a food based economy (everyone needs to eat every day) dont forget there are some 2 billion who are lucky to find enough food to make it through the day, they are victims of government enforced monopolies and inflation.

FRB doesn't work as I have illustrated, it exists not because of demand but by decree because the average university graduate is ignorant as to the mechanism and of the damage it does. (I am happy for FRB to exist, in the Bitcoin world - I for one won't use it, and the ignorant can use it all they want, and suffer the consequences until they are no longer ignorant. (we almost got there at the turn of the century, we may still get there again 100 years later.)

I am not saying we don't need reform I think we do. History is clear, controlee the source of wealth and you controlee the wealth. Money isn't the source of wealth so as long as you create a system that prevents a monopoly of the individual's productivity you are free. (with Bitcoin I don't see a role for a bank, so I feel the future is good, I can save by myself, be free as long as I have dominion over my productivity.)   

Ok I have got it, and I think it is viable, but a little complicated to navigate as a consumer and triad internationally or over the internet.

My interpretation of history differs from you, I don't see an accumulation of wealth through productive contributions to society, I see the accumulation of wealth as something that has been plunders and stolen throughout history, bankers just did it when people started believing the meme that money = wealth.
I agree Bitcoin economy cannot grow while the currency is experiencing such deflation and there will be boom bust cycles, - we need to change our values i.e. we need to understand the role of money, we need to understand, what is and what isn't a monopoly created through a meme. You have to draw on history again, the wealthy did not come by the majority of there wealth through fair and honest means, it was stolen or plunders, and when the system becomes fair the wealth erodes.

Is it going to succeed or isn't it?... You can't be allowed to buy a monopoly, all businesses need to provide value to stay in business, good ones succeed bad ones fail - the end result is, if the Bitcoin wealthy have businesses that provide a benefit through triad we all benefit. 
I don't understand what will happen again? Are we all going to war to enslave our enemy rape there women and steel there land? Or are we are all going to inflate the money supply and enslave ourselves to the bankers again? Or are we going to create an inflationary economy and consume the planet? Bitcoin doesn't enable those things, it disables them. It still looks to me that the manipulation power of the rich is limited, I think the only think they have control over is killing the system by cashing out.

I am still not getting this, what are the problems of a fixed currency?

The only currency I think that should be traded is an individual's productive output ( a result of his efforts, education, creativity, multiplied by technology) I know that will never be quantified so a fixed measure (currency) of the quantifiable output is the next best thing. If the measure (currency) ever changes then quantifying the value of the output gets complicated as the time dimension has 2 variables.

Fair enough. But don't go around using the term "productive and unproductive labor" if you don't want Marxism being brought up.


It is not the system that existed prior to the fed, that was still based on gold. A free market monetary system is not, it is "voluntary fiat" or whatever you'd like to call it.


I agree.


I don't really think you can compare a food-based economy to a growth-based economy. We have, at least in many countries, considerably reduced the need for food as a primary incentive. Now we need to advance as a society. Bastiat is quite famous for debating how interest on capital is a good thing. But it is only a good thing, imo, when the money supply can't be manipulated and the interest can't be manipulated.


This is all well and good, but as I've stated before, FRB exists because the opportunity for it to exist is there. It effectively creates new money but it has the big catch of the money not actually existing. But it works because people are willing to pay the interest--there is demand to grow. If the free market can create currency, there is no need for FRB. Bitcoin doesn't allow for new currency, so I see FRB as a foregone conclusion.


Except that the direct market feedback loop can be manipulated by those with exceptional wealth (or control of it) in a closed supply. So it's not so direct as it first seems. Central banks were created by the Rothschilds and Morgan, people who were heavily in tune with how to manipulate the supply of money. So the "regression theory of central banks" leads back to "wealthy manipulators". Something they were only capable of doing because gold is relatively fixed.


It is what Hayek has essentially said with regards to free market money.

Referring to Sweden's effort to stop minting gold coinage and the predicted rise in value of that coinage above the value of gold:

"I quote this only as illustration of what among the economists who understand their subject is now an undoubted fact, namely that the gold standard is a partly effective mechanism to make governments do what they ought to do in their control of money, and the only mechanism which has been tolerably effective in the case of a monopolist who can do with the money whatever he likes. Otherwise gold is not really necessary to secure a good currency. I think it is entirely possible for private enterprise to issue a token money which the public will learn to expect to preserve its value, provided both the issuer and the public understand that the demand for this money will depend on the issuer being forced to keep its value constant; because if he did not do so, the people would at once cease to use his money and shift to some other kind."


Counterpoint: Allowing capital accumulation to get to a point where a large portion of currency is in the hands of the few, not allowing anyone to create currency is in effect allowing them to steal wealth. Because all they have to do is stop investing or stop spending and then the currency deflates--forcing unnecessary bankruptcies and theft of productivity because of the increased value of currency which is unilaterally more beneficial to the rich than the poor or middle classes. What have the uber wealthy done in recent years with capital accumulation? Play games. Credit default swaps, deca-trillions derivative markets, and other "unproductive labor" that squeezes the economic progress of society to the top. More money is used only to chase more money, not economic progress--to not only the detriment of society as a whole, but also its regression.

Should this unproductive money not be devalued? (See: Demurrage) It stalls progress and causes misery to the vast majority of people so that a few can increase their balance sheets. What is the human capital cost of thousands of intelligent minds going to work on Wall Street because "it's where the money is at" rather than aerospace, pharmaceuticals, or what have you?


See: history. Yes bitcoin is a free market currency and that makes all the difference in the world. It means it will fail. It might stick around through a few excessive deflation/inflationary boom cycles, but people will get tired of it and switch to something like Decrits.


You've forgotten finance again. In a sane economy where half the money was not dropped in a helicopter over the Hamptons, financiers would have a hard time making deflationary loans. But when you have multiple people or groups with 500k+ bitcoins, they can loan at 0% interest down the road to expand the economy, then decide to stop lending or raise interest rates significantly and cause a credit crunch, and boom the wealthy get wealthier. If they don't do this, it's just as likely that the economy will never grow significantly because of the catch-22 of deflationary growth causing difficulty and bankruptcy in paying back loans for business. Either way, people aren't going to put up with this shit when it's optional.


No, the bitcoin wealthy could buy businesses and durable goods as well. Assuming the world economy somehow manages to get through the massive amounts of stumbles along the way to make this possible.


I don't know why you're so optimistic that it won't happen again even though the setup is primed and ready with the new elite.

Here's another fake quote, "from" Albert Einstein, for you: Only two things are infinite, the universe and human stupidity, and I'm not sure about the former.


Aaaand the initial distribution is not "the" problem, only one problem. It doesn't fix the long-term effects of a closed currency, no matter how you might hope and wish it will be different this time.

Let me get this out the way LOL.  No. This forum distracts me from my subjective reality.
As a Vegetarian Buddhist, I couldn't be more Laissez-faire'ist. (I am only a moral vegetarian, in that I know I wouldn't be hungry either if my plane crashed in the Andes with no food and a few survivors.) 
I do hold the view that some 99.99% of people live life subjectively (myself included), we are almost hypnotise to avoid objective reality I could say my interest is: Bitcoin gives me some kind of reality vibe! (i.e. the possibility to live in the magic of creation not some closed deluded and pitiful religious construct of it)

Thanks for the heads up I did some reading on Hayek,s Free-Market Monetary System, and while it has merits over a central bank,( I stand to be corrected) it is in effect the system that existed prior to the Fed.

I was somewhat enlightened when I was introduced to Mises regression theorem of money it gave me a new perspective on Anthropology and economics. (I think you may have mentioned an understudied area of credit and the industrial revolution (or the mercantile class), I would go further - and say Money and Anthropology is understudied.) Money is probably the single greatest form of cooperation that allowed us to evolve. 

My understanding is money originates from a food commodity (Adam Smith) the price that is paid for everything including smelting copper or any other metals.  True commodity money like corn always has the intrinsic value of food.  When a prehistoric economy had excess food that commodity had the value of money, when that economy shrunk to nothing the money (food) still has the intrinsic value, therefore savings are key to our prosperity and innately they do not bear interest. Excess saving therefore lead to a diversity of human ingenuity art and insight through creativity. (As we evolve the interdependence would be defined as economy and it is based on savings).  A regression theory of triad.

As metals have an intrinsic value they can magnify productivity of food several times when forged into tools they also generate commodity status based on the founding commodity food.    Metals eventually become money because of their longevity and enabling characteristics. When an economy contracts for any reason you need access to the food and even saving metal commodities (money substitutes) can represent a misallocation or over investment of food recourses and not enough savings. (Excess in commodity metals demand will drop to nothing if you have misallocated recourses and insufficient commodity food savings.)  So therefore in a free market all commodity food money substitutes can in effect default to have "0" value.
 
With FRB when the economy shrinks (there is drought in prehistoric times) or people stop cooperating - you get a run on the bank,( to get your stored food) and there isn't any, the theft is revealed.  At the level of commodity food money I prefer not to debate if there are benefits to FRB, because it is obvious the presumed reserves aren't there.  So FRB is dependent on under consumption and continued growth. It looks like to me this is where Hayek didn't regress his thinking enough, and Keynes intuitively understood the problem but couldn't identify the broken logic. 

From this perspective Central Bank is insurance, it pads the system ironing out the misallocation of individuals to the benifit of individual banks. I see FRB will eventually lead to a Central Bank because droughts or misallocated recourses don't happen everywhere at the same time, this is a natural evolution.

Within a regression theory of triad ( or the economy), the creation of money supply is not necessary, it creates an elastic that counteracts the direct market feedback loop. (This leads to manipulation of the banks lending policies)  FRB also increases the money supply, (causing inflation) and I don't regret its invention it was as timely and revolutionary in history as Bitcoin is today, but its time has ended. 
? help me understand. I have come to interoperate: you see a concentration of wealth in the hands of a few as destructive for the good of society, am I correct in assuming you feel, adding a mechanism to the money system could prevent this and therefore make for a more just system?

Problems I see in your perspective:
Allowing anyone to create money is in effect allowing them to steeling wealth - and the opposite would then be true if no one could create money, except if money was a direct result of labour expressed as a commodity food and everyone could create it, provided they had access to land. (land ownership is at the center of the problem I see, but that is another thread.) 

Bitcoin solves that problem (and I have a big problem that vast amounts of the coins were created while I was ignorant to its existence, but fortunately it was worthless back then) So I think it is the best money substitute history has created, except for the fact that millions were created before I and most people had even heard about it.
Its value has been given to it by the people and can be taken away at will (in that people can switch to namecoin or something) if Bitcoin sucseeds the vast discrepancy of wealth can't be recreated it is a once off problem.  (so: I imagine if you can / will agree that it if it was given freely you just have to accept it)

you fear having control of the capital allows you to control the economy. this is true with any monopoly, if you have a monopoly on the land you control the food and everything that grows in society for there. Same is true for other services create a monopoly and you can extort a disproportionate amount of recourses for it based solely on the subjective value associated with it and all other dependent benefits. Monopolies are bad and having a monopoly on money would also be bad! How to maintain a monopoly on Bitcoin? 1 it is voluntary; it is easy to replace it using the open source code; anyone can make it - at this moment; once you spend it, it is gone, if you have them all, you have nothing. Not so easy if we have a free market. (do you have evidence to suggest a manopoly is likely?)

Just as creating money transfers wealth disproportionately to the receivers of new money, so the opposite is true wealth moves to the producers of goods and services in the absence of new money creation. (this discrepancy of Bitcoin Rich will eventually even out the onetime disproportional distribution of coin provided there is a free market, in the absence of a free market or manipulation of a monopoly the value will collapse to "0" because of the voluntary nature, greed will keep it going for a while but that only provides opportunity  to the likes of those who see the underlying value structure. not the greedy.) I have my droughts it can succeed as Bitcoin has for the first time in history manifested a worthy example of the paradox of thrift and the lure to Bitcoin is largely based on a subjective reaction a simplified understanding of the eventual benefits . Time will tell.
   
this is true if you can get a monopoly on anything that is the key to human productivity. I don't see anything to suggest that is possible.  So just in case an adjustment should be made to our view of the world. As Bitcoin evolves so does our concept of human rights have to evolve? or we will eventually come full circle and whomever controls the food controls the money, and we all become peasants again.   

For Bitcoin to crash there must be an imbalance of payments, i.e. the majority of money must be converted from Bitcoin to fiat, the los of wealth will be big and the meek shall inherit Bitcoin. I dont fear that scenario as to truly control the wealth you need to control the key sustaining commodities in the word, while this is happening now. I believe we will see a change in understanding, resulting for the converging tipping points, environmental, ideological (political) and economical, we should expect a new renascence even a defining of a new "geological age". And a new Bitcoin based on my earlier presented distribution rate. would solve the early adopter problem presuming Bitcoin is going to grow to have billions of members.   

FRB being theft is pretty debatable. It allows people who store their wealth in banks to earn interest rates. Central-banking interest rates is absolutely, unequivocally theft. Instead of free market competition, nobody earns anything now on saving money, and they in fact lose value because of these uncompetitive interest rates and the inflation caused thereof.


Again, this is a problem of a centrally controlled economy, not FRB. While FRB started out under false pretenses, that is hardly the case now and in a competitive market people would earn competitive interest. However, FRB does have its own problems such as bank runs, but I don't think that it is the root of all economic woe. FRB does compound the problem of low interest rates from a central bank and quantitative easing because it maximizes the "Cantillon effect" if you want to keep calling it that. Again, the problem still lies in central banking. And if a way to do FRB in Bitcoin can be accepted by the general population, it is going to happen there too. It benefits everyone but large holders of bitcoin.


I'm sorry, but this is a bullshit rationalization with no evidence whatsoever. "It happened before, but it won't happen again just because!" ? Does bitcoin ring some kind of Marxist vibe for you?


Was it you I asked about what made you so sure that the New powers will be any better than the old? Because in a fixed supply of currency, the new power certainly isn't going to be democratic in any way, shape, or form. It may take time (then again, probably not with the big bitcoin players that already exist), but as bitcoins accumulate in certain hands, they will gain power exponentially instead of linearly, at least assuming a closed system. The reality is that bitcoin will probably crash when people see the manipulation and they will flock to another another currency, but in the mean time a lot of wealth will be transferred.