Gold standard = inflation

Confident Learner Joined: Jun 09, 2008 Posts: 70

Stuz719 wrote:

Except there has been no change in the money supply, which is what you've been suggesting has occurred. The money supply has remained constant, only the liquidity of some of it has changed.

Deflation is deflation is deflation is deflation , deflation haze accrued making the first part of my theory correct.

You see becomes my deflation mechanism haze bean accepted by you the only possible answers are :

1) The reintroduction of the saved gold coins will generate inflation
2) The reintroduction of the saved gold coins will NOT generate inflation

However it’s a no win for the gold standard number one makes the government FED money better then the unpredictable and possible to inflate gold standards useless.
The second is equaled to admitting that printing money with no stop will never create inflation making every single argument for a gold standard invalided (and contradicting a lot of reality).

PS: a little suggestion have you entertained the notion that what I name “money supply” may be what you name ” liquidity” ? Like in the USA chips mean something different then in Brittan ?

Stuz719 wrote:

(My emphasis).

Note that money supply had increased and yet prices remained stable between 1666 and 1914, despite currencies being based on a gold standard.

By the way you are arguing that:

Inflation = gold standard = deflation

So by extension:

Deflation = inflation

carx wrote:

This example act

You seam to be weary confused about all of this maybe we are using different definitions for words the facts are simple you agreed that in my scenario and your sourced support my conclusions. You see I can name my dog “money supply” the index number “money supply”
Haze no meaning if not defined maybe I’m using the same words like you however if I have a different definitions for them we can have a problem. Like I remember that the index number/word Hell(spelling) in English means piekło in polish and Hell(spelling) in polish means helium in English. Regardless of the words definition I seam to describe a model that you agree and your respected sources agree with so may I ask do you support the logical conclusion gold standard = inflation in certain circumstances ?

But you argue that gold standard = deflation further up in your post!

You can call you dog "money supply" if you want, but shutting him in his kennel doesn't mean he doesn't exist any more, which is what you've been arguing about the economic term money supply....

YES to sum up deflation and inflation in a stabile currency system are the same part of one coin ! If you burry a large amount of gold coins or don’t spend them for a long period of time you get deflation. If the same coins are dug up and introduced to the economy you get inflation. The total amount of gold coins is not changing only their availability on the market ! And because we get inflation every person on the end of the inflation line is going to get ether bankrupt or robed or stuff. Example you sell your farm for 5000 gold coins (a lot of money) you go to a shop the next day only to learn that even the cheapest product is worth 5000000000 gold coins You lost a fortune (a farm ) for something worthless (5000 gold coins).
The circularity of the inflation and deflating is irrelevant inflation in the 50% and above range is dangerous.

PS: a little suggestion have you entertained the notion that what I name “money supply” may be what you name ” liquidity” ? Like in the USA chips mean something different then in Brittan ?

Grand Poster Joined: Apr 22, 2005 Posts: 1036

carx wrote:

Deflation is deflation is deflation is deflation

But you also argued that deflation is inflation!

carx wrote:

a little suggestion have you entertained the notion that what I name “money supply” may be what you name ” liquidity” ? Like in the USA chips mean something different then in Brittan ?

No, "money supply" is money supply, "liquidity" is liquidity.

I think we're talking in circles here, because you seem to be confusing certain liquidity limitations affecting the overall level of money supply - and the two are not the same thing.

Coins and notes are more liquid (in general terms) than promisory notes, because (in general terms) they are more readily accepted as a medium of exchange.

For example:

I have $100 in $10 bills

I have $1000 on deposit at the bank

I have $1000 limit on my credit card

Total money supply = $2100

My local Indian restaurant doesn't accept credit cards, because they are charged for handling the transactions.

So to them my liquid assets that I can use to pay for a meal with are $1100, because they will accept cash or a cheque drawn on a personal bank account.

The money supply (in broad terms) has not changed, but the liquidity of different parts of the money supply is different.

Confident Learner Joined: Jun 09, 2008 Posts: 70

Stuz719 wrote:

carx wrote:

Deflation is deflation is deflation is deflation

But you also argued that deflation is inflation!

No NO NO I argue that first you have deflation and after this inflation.
FIRST deflation and after this inflation.
That is what I’m saying and I have bean saying this for a long time.
Deflation is not inflation however after deflation is inflation in my scenario will acure.
First deflation and after that inflation.
I have described this in my scenario !

Address my scenario , I have given you a model please answer the following.
After the deflation what will happen after reintroducing the hidden/saved gold coins ?
My answer Inflation. Do you agree ?

Grand Poster Joined: Apr 22, 2005 Posts: 1036

carx wrote:

After the deflation what will happen after reintroducing the hidden/saved gold coins ?
My answer Inflation. Do you agree ?

Possibly.

There is a difference between hidden and saved in your example - the two terms are not necessarily interchangeable, although you have been arguing that merely hiding coins removes them from the money supply.

The market does not necessarily know that the coins have been hidden, therefore the assumption that deflation will follow is not necessarily going to be borne out in practice.

Let me give you an example - if Ted the fish seller and Adam the butcher don't know that of the $100 in circulation Bob has $10 hidden under his bed why would they lower their prices UNLESS Bob starts hoarding more money so that there is no longer sufficient liquid money available for them to viably trade.

Then if Bob suddenly decides to start spending his money (that was never removed from the money supply, note, just had its liquidity reduced) what will happen is, assuming demand rises to the point where a new equilibrium is required, prices will rise to the point they were before.

Whether this is inflation or not in the long run may be a moot point, because actually what is happening is a reinstatement of the previous market equilibrium.

I think what you are trying to describe is actually that an increasing money supply is inflationary, partly possibly due to fractional banking based on a gold standard.

Confident Learner Joined: Jun 09, 2008 Posts: 70

Stuz719 wrote:

carx wrote:

After the deflation what will happen after reintroducing the hidden/saved gold coins ?
My answer Inflation. Do you agree ?

Possibly.

There is a difference between hidden and saved in your example - the two terms are not necessarily interchangeable, although you have been arguing that merely hiding coins removes them from the money supply.

The market does not necessarily know that the coins have been hidden, therefore the assumption that deflation will follow is not necessarily going to be borne out in practice.

I think what you are trying to describe is actually that an increasing money supply is inflationary, partly possibly due to fractional banking based on a gold standard.

My friend congratulations of maybe understanding my initial proposal.

So do you maybe agree that the gold standard could maybe generate inflation?

Besides I would be careful to actually tell me what I’m think previously you clamed I say that deflation is inflation.

Now answer me this how dose the market (a absurd notion) get information ???
And what makes you uncertain about my model ???

PS: It seams you are using economic superstition referring to a protocol like to a function or entity. The free market is simply a protocol of transfer not a function it haze no goal or point its like saying the English langue protocol is dictating this discussion just because we are using it to communicate.

Grand Poster Joined: Apr 22, 2005 Posts: 1036

carx wrote:

Stuz719 wrote:

carx wrote:

After the deflation what will happen after reintroducing the hidden/saved gold coins ?
My answer Inflation. Do you agree ?

Possibly.

There is a difference between hidden and saved in your example - the two terms are not necessarily interchangeable, although you have been arguing that merely hiding coins removes them from the money supply.

The market does not necessarily know that the coins have been hidden, therefore the assumption that deflation will follow is not necessarily going to be borne out in practice.

I think what you are trying to describe is actually that an increasing money supply is inflationary, partly possibly due to fractional banking based on a gold standard.

My friend congratulations of maybe understanding my initial proposal.

So do you maybe agree that the gold standard could maybe generate inflation?

Besides I would be careful to actually tell me what I’m think previously you clamed I say that deflation is inflation.

Now answer me this how dose the market (a absurd notion) get information ???
And what makes you uncertain about my model ???

PS: It seams you are using economic superstition referring to a protocol like to a function or entity. The free market is simply a protocol of transfer not a function it haze no goal or point its like saying the English langue protocol is dictating this discussion just because we are using it to communicate.

I'm wary of saying that a gold standard may cause inflation - rather it is the operation of the standard which can create inflationary pressure. The two are not necessarily the same thing.

As the example earlier said the price of bread in England stayed stable for around 250 years with currency based on a gold standard - the rise of fractional banking, technological advance and supply interruption (war) coincided with the rise in bread prices. So I think it's dangerous to try an attribute it all to one thing.

The market, in terms of perfect competition, relies on openness of information regarding stock levels and prices, and knowledge of level of demand and available money (medium of exchange).

I don't know if this holds true for other countries, but think of it like the bookmakers at a horse race - each can see the odds each other is offering on each horse, and have a good idea as to the number of customers available - by watching the odds set by competitors a bookie can adjust his own odds to seek to attract custom and maximise profit.

The free market does have a goal - maximised profit. This is generally a fundamental assumption, that suppliers will only enter the market if there is a profit available, and they will seek to maximise the profit they make at all times.

I don't see how this is superstition - please, if you have an example of a market which attracts new suppliers who operate at a loss I'd be intrigued to hear it. Obviously the public sector doesn't count as it is often a monopoly supplier (Canadian healthcare).

Confident Learner Joined: Jun 09, 2008 Posts: 70

Your opinion is just a opinion nothing more nothing less. However I’m no dealing in data that can be questioned I’m in the realm of logical and mathematical truths and profs. Now my deduction is perfect I have proven beyond doubt that a gold standard can and will create inflation you can not sneak you way out of this I have demonstrated a scenario and its undeniable like 2+2=4. Address the scenario not speculations about the past please.

Now my model shows a option of a arrangement of factors that will result in inflation and given the write manipulation give hyperinflation 101 % and more.
My scenario is impossible to pull of under a central bank system (if deflation is detected they star printing money ) however can be devastating under a gold standard. However some circumstances can trigger a deflation spiral making the effects catastrophic.

Now using your logic we are not speaking the English league is controlling us to make this discussion. The free market is simply a transfer protocol of barded given options of acceptance of trade or rejection or bartering about it. There is nothing else to it nothing more nothing less. Now you ask why its superstition ? Don’t you see that you attribute the actions of individuals to a protocol deducing this we are not having a conversation the TCP/IP protocol is generating this discussion.

Now you introduced this free market concept define it , show how a protocol can have a direction or a motive (a impossibility if the free market haze no neural network or brain or programming ).

You are confusing persons (corporations + people) who have a profit motive and operate using the free market protocol and actual persons who have a profit motive. Besides ad populum is always the most favorite logical fallacy of all humans.

Grand Poster Joined: Apr 22, 2005 Posts: 1036

carx wrote:

Your opinion is just a opinion nothing more nothing less. However I’m no dealing in data that can be questioned I’m in the realm of logical and mathematical truths and profs. Now my deduction is perfect I have proven beyond doubt that a gold standard can and will create inflation you can not sneak you way out of this I have demonstrated a scenario and its undeniable like 2+2=4. Address the scenario not speculations about the past please.

Ah, I see, we're in theoretical mode. In which case I have to question the worth of your "perfect" model if it isn't applicable in the real world.

I seriously question that you have "proven beyond doubt" anything, because it could be argued that actually the inflation in your original example is only temporary anyway, because money supply is permanently fixed at $100.

You made the assumption that the money supply had been reduced if people hid coins under their beds, whereas you regarded money on deposit with banks as in circulation. What's the difference between putting a coin under you bed or in your pocket? You make the implicit assumption that there is one.

If you can't debate politely perhaps we should call it a day.

carx wrote:

Now my model shows a option of a arrangement of factors that will result in inflation and given the write manipulation give hyperinflation 101 % and more.

And where does this figure of 101% come from? You have just made it up.

carx wrote:

My scenario is impossible to pull of under a central bank system (if deflation is detected they star printing money ) however can be devastating under a gold standard. However some circumstances can trigger a deflation spiral making the effects catastrophic.

Define "catastrophic" in this context? This is a very emotive term to suddenly throw in.

carx wrote:

Now using your logic we are not speaking the English league is controlling us to make this discussion. The free market is simply a transfer protocol of barded given options of acceptance of trade or rejection or bartering about it. There is nothing else to it nothing more nothing less. Now you ask why its superstition ? Don’t you see that you attribute the actions of individuals to a protocol deducing this we are not having a conversation the TCP/IP protocol is generating this discussion.

Now you introduced this free market concept define it , show how a protocol can have a direction or a motive (a impossibility if the free market haze no neural network or brain or programming ).

There are ample definitions of what a market is, and what perfect competition is. I don't see that my repeating any of them would add any value here.

I seriously think you are missing the point of the whole idea of the market if you think that it is merely a protocol for trade. In one sense perhaps you are right, I can see where you are coming from, but you are attempting to put words into my mouth when you ask me to define its motives - entrants to the market (buyers and sellers) have motives.

It could be argued that in fact the motive of the market is to enable buyers and sellers to trade according to its rules, because a market is a function of the buyers and sellers in it - without both buyers and sellers there is no market, so its "motive" must be to facilitate both.

carx wrote:

You are confusing persons (corporations + people) who have a profit motive and operate using the free market protocol and actual persons who have a profit motive. Besides ad populum is always the most favorite logical fallacy of all humans.

No, a basic tenet of economics is that, ceteris parabus, entrants to the market will seek to maximise profit - whether these are corporations or individuals.

You seem to be confusing monetary profit with the wider concept.

Confident Learner Joined: Jun 09, 2008 Posts: 70

Stuz719 wrote:

Ah, I see, we're in theoretical mode. In which case I have to question the worth of your "perfect" model if it isn't applicable in the real world.

I seriously question that you have "proven beyond doubt" anything, because it could be argued that actually the inflation in your original example is only temporary anyway, because money supply is permanently fixed at $100.

You made the assumption that the money supply had been reduced if people hid coins under their beds, whereas you regarded money on deposit with banks as in circulation. What's the difference between putting a coin under you bed or in your pocket? You make the implicit assumption that there is one.

If you can't debate politely perhaps we should call it a day.

Actually it’s a model of a simulation derived from experiments. Don’t believe me make the experiment !!! Make the experiment !!! Make the experiment !!! Make the experiment !!! Get some friend create a mini closed economy and make that exact thing I have described.

Here is why the prices must rise if one person in my simulated model digs out his money he would be able to buy more stuff and under the current prices take everything in the economy and everyone would need to charge more money to have more to actually feed themselves and survive. So ether prices rise or everyone else dies I think rather the prices rise.

My dear friend I assure you I can argue politely , not the very difference lies not in the fact that you hide a gold coin under your bead or in your pocket or in your forest because thus are forms or reducing the money supply. However introducing banks if confusing and often implies more things for example modern banks are making operations with your money and investing it so your money increases on your bank account thus operations can hardly be named not using you money in the economy. I have address this in a different post however you seam not to have noticed it.
The temporary inflation is still inflation and someone caught in the inflation haze still lost their stuff this haze bean pointed out in previous posts.

Stuz719 wrote:

carx wrote:

Now my model shows a option of a arrangement of factors that will result in inflation and given the write manipulation give hyperinflation 101 % and more.

And where does this figure of 101% come from? You have just made it up.

Now calculate in percentages how moth the average price increased if yesterday the average price whose 3$ and today its 300 $.A little note be careful in discussing economics with someone who past at least firs semester of economics (obviously you didn’t because you don’t know how to calculate inflation in percentages [source Jerzy Czesław Ossowski wybrane zagadnienia z makroekonomii sopot 2004 ISBN 83-60054-00-2 page 118 to 119]). And if we didn’t have inflation above 100% we wouldn’t need the concept of hyper inflation http://www.economist.com/research/economics/alphabetic.cfm?letter=H#hyper-inflation
“it wreaks huge economic damage. After the first world war, German prices at one point were rising at a rate of 23,000% a year before the country’s economic system collapsed, creating a political”
O snap.(If I would be impolite I would classify you for a flat earthed and lath at you for not reading your own sources or arguing about stuff you don’t understand please keep in mined I didn’t do thus things)

Stuz719 wrote:

carx wrote:

My scenario is impossible to pull of under a central bank system (if deflation is detected they star printing money ) however can be devastating under a gold standard. However some circumstances can trigger a deflation spiral making the effects catastrophic.

Define "catastrophic" in this context? This is a very emotive term to suddenly throw in.

Well I have to admit you got me what I tried to babble was that deflation would increase itself stopping the economy (hey the value of my money is increasing I wont spend it so it increases more ) and after that creating insane inflation and robbing most people of their money. Would you agree that the could be named catastrophic for people and the economy or is it a to emotional conclusion ?(please see like I admit to a error if its pointed out )

Stuz719 wrote:

No, a basic tenet of economics is that, ceteris parabus, entrants to the market will seek to maximise profit - whether these are corporations or individuals.

You seem to be confusing monetary profit with the wider concept.

No you seem not to understand there are persons in the free market that don’t seek to increase their profits example charities. And how about gifts , damnations thus are forms of transfer that don’t increase the profit of the seller.

Grand Poster Joined: Apr 22, 2005 Posts: 1036

carx wrote:

Stuz719 wrote:

carx wrote:

Now my model shows a option of a arrangement of factors that will result in inflation and given the write manipulation give hyperinflation 101 % and more.

And where does this figure of 101% come from? You have just made it up.

Now calculate in percentages how moth the average price increased if yesterday the average price whose 3$ and today its 300 $.A little note be careful in discussing economics with someone who past at least firs semester of economics (obviously you didn’t because you don’t know how to calculate inflation in percentages [source Jerzy Czesław Ossowski wybrane zagadnienia z makroekonomii sopot 2004 ISBN 83-60054-00-2 page 118 to 119]). And if we didn’t have inflation above 100% we wouldn’t need the concept of hyper inflation http://www.economist.com/research/economics/alphabetic.cfm?letter=H#hyper-inflation
“it wreaks huge economic damage. After the first world war, German prices at one point were rising at a rate of 23,000% a year before the country’s economic system collapsed, creating a political”
O snap.(If I would be impolite I would classify you for a flat earthed and lath at you for not reading your own sources or arguing about stuff you don’t understand please keep in mined I didn’t do thus things)

As I'm someone who studied economics well past the first semester, thank-you very much, I'll pick you up again on your 101%.

If the average price yesterday was $3 and today it's $3000 then that's an inflation of 100,000%. 101% inflation would make the price significantly lower.

I know what the definition of hyperinflation is - by your own admission your model relies on the "right manipulation" to give hyperinflation. This is stating the obvious, and doesn't necessarily prove that hyperinflation will always result from a reduction in money supply.

carx wrote:

Stuz719 wrote:

carx wrote:

My scenario is impossible to pull of under a central bank system (if deflation is detected they star printing money ) however can be devastating under a gold standard. However some circumstances can trigger a deflation spiral making the effects catastrophic.

Define "catastrophic" in this context? This is a very emotive term to suddenly throw in.

Well I have to admit you got me what I tried to babble was that deflation would increase itself stopping the economy (hey the value of my money is increasing I wont spend it so it increases more ) and after that creating insane inflation and robbing most people of their money. Would you agree that the could be named catastrophic for people and the economy or is it a to emotional conclusion ?(please see like I admit to a error if its pointed out )

Stuz719 wrote:

No, a basic tenet of economics is that, ceteris parabus, entrants to the market will seek to maximise profit - whether these are corporations or individuals.

You seem to be confusing monetary profit with the wider concept.

No you seem not to understand there are persons in the free market that don’t seek to increase their profits example charities. And how about gifts , damnations thus are forms of transfer that don’t increase the profit of the seller.

No, you still misunderstand. Gifts and damnations carry a profit, because there is a transaction, but it is not a monetary profit.

I don't disagree - there are free market suppliers who do may not seek to maximise monetary profit, but they DO seek to maximise profit. Seriously, think about it.

Confident Learner Joined: Jun 09, 2008 Posts: 70

Stuz719 wrote:

As I'm someone who studied economics well past the first semester, thank-you very much, I'll pick you up again on your 101%.

If the average price yesterday was $3 and today it's $3000 then that's an inflation of 100,000%. 101% inflation would make the price significantly lower.

I know what the definition of hyperinflation is - by your own admission your model relies on the "right manipulation" to give hyperinflation. This is stating the obvious, and doesn't necessarily prove that hyperinflation will always result from a reduction in money supply.

.

If the price rises above 100% in a yare (101% and more) then its hyper inflation the exact model that I’m discussing for a example is fitting the description of hyperinflation. However inflation of 101% while being lover then 1000% is still a inflation and we are talking about a lesser harm . This discussion seam peculiar because I have written exactly :

carx wrote:

hyperinflation 101 % and more.
.

Now good sir may I ask is 100000 % above 101% ? is 100000% more then 101% ? Didn’t I write this ?It seams that you have dropt the more part from my 101% and more definition of hyperinflation and the my scenario of hyperinflation. I Have no idea what you are arguing here. Can I ask you something is English your native language ?

Besides we are arguing about semantics I already have pointed out that you suppose to make the experiment because it works every time. If not please provide the repeatable experiment that would contradict even the most drastic of my scenarios and show no inflation or deflation. Please remember I’m arguing tat after the reintroduction of the gold thee will be inflation.

Grand Poster Joined: Apr 22, 2005 Posts: 1036

carx wrote:

Can I ask you something is English your native language ?

Yes.

carx wrote:

Besides we are arguing about semantics I already have pointed out that you suppose to make the experiment because it works every time. If not please provide the repeatable experiment that would contradict even the most drastic of my scenarios and show no inflation or deflation.

OK...

carx wrote:

Please remember I’m arguing tat after the reintroduction of the gold thee will be inflation.

Gold in circulation: $100.

Fish cost $1 each.

$30 put under bed.

Price of fish goes up to $2.

Inflation = 100%.

$30 got out from under bed.

Price of fish falls to $1.

Disinflation = 50%. Not inflation "following reintroduction of the gold" as you claim, and say that your model unequivocally proves.

Overall inflation = 0%.

So no sustained inflation, no sustained hyperinflation.

Posted: Tue Nov 25, 2008 4:09 pm

Errmmmm... Correct me if I am wrong but doesnt inflation occur with EVERY type of currency? And that the gold standard merely reduces the amount of impact inflation has on currency?


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