Topic: wtf:steve forbes predicts adoption of gold standard 'within the next five years' (Read 5010 times)
May 14, 2011, 02:16:08 PM
May 13, 2011, 11:45:43 AM
Interesting. Do you think we've seen or will see price inflation merely from the act of increasing the monetary base, or will that only happen if the banks start lending the reserves?
If the Fed had not increased the monetary base, we would have had deflation. I'm sure the increase in MB we've seen is responsible for the modest inflation we've seen so far. And in the future, the more banks start to lend, the more price inflation we will see.Quote
Also, wasn't the stated goal to give banks money for the express purpose of lending in order to stimulate the economy?
That may have been the stated reason, but as the Fed is paying interest on excess reserves, I don't see how that could be the only reason. From what I understand the Fed hasn't always paid interest on excess bank reserves, so this sounds like a conscious choice to try to increase bank reserves. 
May 13, 2011, 11:23:53 AM
I believe it is part of the attempt to make the banks more solvent. More cash in reserves -> less likelihood they will run out, default, and cause further economic trouble. Banks are paid interest on reserves kept at the Fed, so it's not completely unprofitable for the banks.
Interesting. Do you think we've seen or will see price inflation merely from the act of increasing the monetary base, or will that only happen if the banks start lending the reserves? Also, wasn't the stated goal to give banks money for the express purpose of lending in order to stimulate the economy?
May 13, 2011, 11:16:39 AM
Do you have any insight to the reasoning behind the sharp increase in M0? What's the scenario in which steep inflation doesn't occur, the banks sit on their excess reserves (essentially raising the reserve requirement)? Isn't that unprofitable?
I believe it is part of the attempt to make the banks more solvent. More cash in reserves -> less likelihood they will run out, default, and cause further economic trouble. Banks are paid interest on reserves kept at the Fed, so it's not completely unprofitable for the banks.
May 13, 2011, 11:00:36 AM
Yes, the monetary base has tripled. However, all that money is sitting in banks' excess reserves doing nothing. Look at the money multiplier around 2010:
http://research.stlouisfed.org/fred2/series/MULT
If you look at M2, you will see an increase around that time, but nowhere near triple.
http://research.stlouisfed.org/fred2/series/M2
If banks start aggressively lending out their reserves, and the Fed does not quickly contract, then we will see steep inflation.
http://research.stlouisfed.org/fred2/series/MULT
If you look at M2, you will see an increase around that time, but nowhere near triple.
http://research.stlouisfed.org/fred2/series/M2
If banks start aggressively lending out their reserves, and the Fed does not quickly contract, then we will see steep inflation.
Do you have any insight to the reasoning behind the sharp increase in M0? What's the scenario in which steep inflation doesn't occur, the banks sit on their excess reserves (essentially raising the reserve requirement)? Isn't that unprofitable?
May 13, 2011, 09:56:41 AM
Yes, the monetary base has tripled. However, all that money is sitting in banks' excess reserves doing nothing. Look at the money multiplier around 2010:
http://research.stlouisfed.org/fred2/series/MULT
If you look at M2, you will see an increase around that time, but nowhere near triple.
http://research.stlouisfed.org/fred2/series/M2
If banks start aggressively lending out their reserves, and the Fed does not quickly contract, then we will see steep inflation.
http://research.stlouisfed.org/fred2/series/MULT
If you look at M2, you will see an increase around that time, but nowhere near triple.
http://research.stlouisfed.org/fred2/series/M2
If banks start aggressively lending out their reserves, and the Fed does not quickly contract, then we will see steep inflation.
May 13, 2011, 09:31:00 AM
May 13, 2011, 07:10:03 AM
Such a sudden increase does not cause concern about things to come? Care to share your supplier of rose colored glasses so we can enjoy the hyperinflation together?
The increase is essentially just cancelling out the losses from bad mortgages and other loans. It's preventing massive deflation, not creating hyperinflation.
Besides this process robbing the people who defaulted on their mortgages blind you have no idea what you're talking about. If you'd understand fractional reserve banking you'd know that it wasn't just as simple as replenishing the amount of dollars that got wiped out since now banks have their reserves tripled and just waiting for the new wave of loan demand which will explode M3 into the stratosphere.
Good luck holding onto your precious system then!
May 12, 2011, 11:50:26 PM
Such a sudden increase does not cause concern about things to come? Care to share your supplier of rose colored glasses so we can enjoy the hyperinflation together?
The increase is essentially just cancelling out the losses from bad mortgages and other loans. It's preventing massive deflation, not creating hyperinflation.
May 12, 2011, 11:16:27 PM
The US economy continues to work, as do I, as do many other fiat currencies. That graph shows some number going up... while hundreds of millions of US citizens continue to work, eat, sleep and buy consumer goods.
The graph shows that the monetary based has tripled in the past few years.
Quote
The monetary base is highly liquid money that consists of coins, paper money (both as bank vault cash and as currency circulating in the public), and commercial banks' reserves with the central bank.
Quote
The monetary base is called high-powered because an increase in the monetary base (M0) can result in a much larger increase in the supply of bank money, an effect often referred to as the money multiplier. An increase of 1 billion currency units in the monetary base will allow (and often be correlated to) an increase of several billion units of "bank money". This is often discussed in conjunction with fractional-reserve banking banking systems.
Such a sudden increase does not cause concern about things to come? Care to share your supplier of rose colored glasses so we can enjoy the hyperinflation together?
May 12, 2011, 11:05:40 PM
Every fiat currency system that has ever existed and failed, has done so in nearly an identical manner. vladimir's statement above sums it up nicely.
I live a nice lifestyle with US dollars, as do a great many others. I don't see direct evidence of "failed."
The US economy continues to work, as do I, as do many other fiat currencies. That graph shows some number going up... while hundreds of millions of US citizens continue to work, eat, sleep and buy consumer goods.
May 12, 2011, 10:52:29 PM
Every fiat currency system that has ever existed and failed, has done so in nearly an identical manner. vladimir's statement above sums it up nicely.
I live a nice lifestyle with US dollars, as do a great many others. I don't see direct evidence of "failed."
May 12, 2011, 10:03:46 PM
Every fiat currency system that has ever existed and failed, has done so in nearly an identical manner. vladimir's statement above sums it up nicely.
I live a nice lifestyle with US dollars, as do a great many others. I don't see direct evidence of "failed."
May 12, 2011, 09:40:32 PM
I know.
I was Anarchist myself when younger even.
But later I realized that pure anarchy is a utopia, you need at least judges and enforcers of law, because some individual WILL conclude that whatever is best for him, must be done, when that thing is not good for everyone else.
I was Anarchist myself when younger even.
But later I realized that pure anarchy is a utopia, you need at least judges and enforcers of law, because some individual WILL conclude that whatever is best for him, must be done, when that thing is not good for everyone else.
Sure, but you don't need a state in order to have a legal system. Look at Xeer, medieval Iceland, etc. I find polycentric law and private providers of protection to be a superior option to a monopoly. Why is it that most people think monopolies are bad, except the state?
May 12, 2011, 08:55:57 PM
What is good for you, is not necessarily what is good for the collective.
There is no collective. Just a bunch of individuals.
I guess you are Anarchist or some variation of that. Arguing with you I am sure won't work.
Bitcoin is anarchistic.
I know.
I was Anarchist myself when younger even.
But later I realized that pure anarchy is a utopia, you need at least judges and enforcers of law, because some individual WILL conclude that whatever is best for him, must be done, when that thing is not good for everyone else.
I still have anarchist leaning, and I am against the massive states that we have today, central banking, fiat, heavy taxation, or states that do everything but the thing they were supposed to do...
But I still think, that leaders are needed, to make decisions that benefit a group, not individuals. I am strongly against individualism.
May 12, 2011, 08:17:53 PM
[...] fiat long term value is doomed to asymptotically approach zero, by design.
I respectfully disagree; it's just a choice of systems.
Every fiat currency system that has ever existed and failed, has done so in nearly an identical manner. vladimir's statement above sums it up nicely.
May 12, 2011, 07:45:42 PM
If you're not an anarcho-capitalist, even leaning towards it, why would you be here? I agree that there is no collective.
Forbes is a buzzword bingo assclown. He's part of the system that relies on devaluing the money supply to steal wealth.
He only comes out of his casket during presidential election season and always away from direct sunlight.
Forbes is a buzzword bingo assclown. He's part of the system that relies on devaluing the money supply to steal wealth.
He only comes out of his casket during presidential election season and always away from direct sunlight.
May 12, 2011, 06:28:34 PM
What is good for you, is not necessarily what is good for the collective.
There is no collective. Just a bunch of individuals.
I guess you are Anarchist or some variation of that. Arguing with you I am sure won't work.
Bitcoin is anarchistic.
May 12, 2011, 06:15:24 PM
What is good for you, is not necessarily what is good for the collective.
There is no collective. Just a bunch of individuals.
I guess you are Anarchist or some variation of that. Arguing with you I am sure won't work.
May 12, 2011, 05:34:20 PM
What is good for you, is not necessarily what is good for the collective.
There is no collective. Just a bunch of individuals.
"There is no such thing as society" ~Margaret Thatcher
May 12, 2011, 02:21:29 PM
What is good for you, is not necessarily what is good for the collective.
There is no collective. Just a bunch of individuals.
May 12, 2011, 02:09:23 PM
A benevolent dictator, Plato's philosopher-king, can do a great amount of good. Problem is, most dictators are rarely if ever benevolent or wise.
I believe this to be a fallacy. Only I know what is best for me. In order to do good for all and not just some, a benevolent dictator must also be omniscient. I don't believe in the existence of gods, so that idea is right out.
What is good for you, is not necessarily what is good for the collective.
May 12, 2011, 02:01:33 PM
A benevolent dictator, Plato's philosopher-king, can do a great amount of good. Problem is, most dictators are rarely if ever benevolent or wise.
I believe this to be a fallacy. Only I know what is best for me. In order to do good for all and not just some, a benevolent dictator must also be omniscient. I don't believe in the existence of gods, so that idea is right out.
May 12, 2011, 01:44:18 PM
If you are bullish on them long term you try to buy on the dips.
But buy the physical metal, not some paper derivative.Yep, I am intending to do that, and do not figured yet how to do it...
May 12, 2011, 01:23:30 PM
If you are bullish on them long term you try to buy on the dips.
But buy the physical metal, not some paper derivative. May 12, 2011, 01:09:02 PM
[...] fiat long term value is doomed to asymptotically approach zero, by design.
I respectfully disagree; it's just a choice of systems.
Fiat is an endorsement of "wise men" controlling the currency supply. Gold/bitcoins make it far more difficult for men to change supply at a whim.
Like dictatorships, fiat is "absolute power." A benevolent dictator, Plato's philosopher-king, can do a great amount of good. Problem is, most dictators are rarely if ever benevolent or wise.
Supply-constrained currencies are pro-cyclical, tending to magnify booms and busts. In theory, the central bank may work against this. In practice... men are never perfect.
It's a choice between two systems with imperfect outputs. I think a mix of the two is most optimal, so that you're not a slave to the whims of either practice.
May 12, 2011, 12:58:40 PM
Steve Forbes is kind of a nutball.
May 12, 2011, 12:57:29 PM
Quote
I still have to buy metals...
IANAInvestment Advisor
but it isn't the worst time to buy at the moment - gold & esp. silver have sold off quite a lot recently. If you are bullish on them long term you try to buy on the dips.
May 12, 2011, 12:16:16 PM
I still have to buy metals...
May 12, 2011, 12:13:52 PM
Gold and bitcoin are complimentary, they will coexist. On the other hand fiat long term value is doomed to asymptotically approach zero, by design.
I agree with this. I hold gold, silver, and bitcoins. This is my fiat insurance portfolio.
May 12, 2011, 11:46:46 AM
We must remember, that one of the reasons gold is used for trading, is because gold is very hard to destroy.
What happen if internet go down? Most people take for granted that this will never happen. Having your entire wealth in Bitcoins would be stupid as having your entire wealth in Gold (that can be robbed) or your entire wealth in fiat (that can crash and get valued 0)
What happen if internet go down? Most people take for granted that this will never happen. Having your entire wealth in Bitcoins would be stupid as having your entire wealth in Gold (that can be robbed) or your entire wealth in fiat (that can crash and get valued 0)
May 12, 2011, 11:39:21 AM
Even though I'm a big believer and supporter of Bitcoin you still can't go against a 5000 year old tradition. You just can't.
Why? At some point things have to change:) the old generation is tied to the gold, bitcoins are for us and future generations. May 12, 2011, 10:30:02 AM
Even though I'm a big believer and supporter of Bitcoin you still can't go against a 5000 year old tradition. You just can't.
A 5,000 year old tradition of pro-cyclical behavior...
May 12, 2011, 09:35:34 AM
May 12, 2011, 09:30:55 AM
maybe the worth of gold will skyrocket to the point where it'll actually approach the "worth" of the currency in circulation
May 12, 2011, 08:44:36 AM
Even though I'm a big believer and supporter of Bitcoin you still can't go against a 5000 year old tradition. You just can't.
May 12, 2011, 08:38:59 AM
Quote
A return to the gold standard by the United States within the next five years now seems likely, because that move would help the nation solve a variety of economic, fiscal, and monetary ills, Steve Forbes predicted during an exclusive interview this week with HUMAN EVENTS.
"What seems astonishing today could become conventional wisdom in a short period of time," Forbes said.
"What seems astonishing today could become conventional wisdom in a short period of time," Forbes said.
http://www.theatlantic.com/business/archive/2011/05/a-gold-standard-in-five-years/238771/
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