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The gains on the part of business and the banks are called “stimulation of the economy.” The losses on the part of the common person, or middle class, are call “inflation.” In this way the government economist pretends that these are two different things. They think they can have the first without the second. But these are not two different things. If a bank can print money and get richer by it, then you and I are getting poorer by it. There is no way to have “stimulation” of the economy without inflation. If a thief steals your money, his gain is your loss. You cannot have one without the other. You cannot pull money out of thin air, give it a value and say no one loses anything. For every action, there is a reaction. It is a very basic law. But then, I don't make the laws, the bankers do.
They tell us how much the dollar is worth and how high the inflation rate is.
This argument assumes that the economy must be a net-zero system. One person's gain must be another person's loss. Pure claptrap.
It is possible for EVERYONE to come out ahead. And it is possible for there to be economic growth without inflation.
By your argument, if I purchase a car from a dealer, the dealer has "gained" and I have "lost" in the deal. But that argument doesn't take into consideration the value of the car that I purchased. We BOTH gained in the transaction, and neither of us lost.
Similarly, when a "middle class" person spends money to purchase food, clothing, whatever, he gains because he is getting what he wants. The seller gains because he gets money. The government gains because of sales and income taxes. When prices go up (inflation), the middle class person has lost purchasing power, the seller sells less product, and the government gets less income. Everyone looses equally in that scenario. The result is that the seller lowers his prices to increase sales (deflation or a decrease in inflation), and/or the government lowers tax rates, thus increasing the purchasing power of the middle-class individual, and again, everyone gains. In the end, everyone gains or loses equally. The "gain" by one person does not result in the loss by another.
This idea that the economy has to have a net-zero outcome is simplistic and not based in reality. Sure, there are winners and losers in any economy. But the gains of one do not result in the losses of another. Gain does not result in loss.
Bernake just said this morning that the economy will slow. What that means is that the dollars they have printed are so low in actual value and that prices are so high, the bubble has broke. I am not saying the dollar has no value at all, it has the value that the fed attaches to it. What you need to understand is actual value. Actual value of your labor and how the inflation of the dollar lowers that value. That is how they steal from you.
Now, we slide down, valuating the virtual inflated worth of the virtual inflated dollar towards the depression side. When the dollars value gets to the point that your actual wages, not the inflated aspect of your wages, makes you to expensive, you get laid off. Not you per se but many people will now be losing their jobs.
When prices go up, wages stay the same or maybe a slight increase over years. The inflated dollar causes prices to rise beyond your actual wage.
If you would look at it with an open mind instead of championing what you were told to be true, you would understand and see I am telling you the truth.
But, until you fully understand how money works, everything you state to be a fact is based on inaccurate information, making it mostly false.
Any government that steals their citizens labor is facist. People that are brainwashed into thinking that is ok are fascist with them.
We are now on the downward swing of the fed system when in reality, we still have the same amount of product and services we had yesterday, minus the amount of oil we have used in the last 24 hours. Does that tell you something about manipulation?
Sorry, but the refinery bottleneck theory doesn't fit the facts. Crude oil is the raw material for refineries, and transportation fuels are the primary outputs. If a lack of refinery capacity were the main problem, crude oil would be selling at a big discount to refined products, refineries would be making money hand over fist and companies would be falling all over themselves to build more.
None of this is happening. Crude is expensive, refinery margins are modest at best, and new investment in refineries is also (appropriately) modest. The supply-demand shift that's happening is more fundamental, having mostly to do with huge demand increases in the developing world, especially India and China. We ain't seen nothin' yet. A company in India has just announced plans to produce a $2500 automobile.
Having said that, I do agree with your conclusion that it's not as big a deal as many would like to make of it. Transportation has been artificially cheap for a very long time, so there is a lot of potential to adapt to a more realistic (significantly higher) price for it. One by-product of that will be a reduction in the cutthroat competition between domestic (i.e., nearby) and foreign (i.e., distant) producers of everything from baby shampoo to steel. Consumers will pay more, but more of their dollars will end up in their their neighbors' pay envelopes instead of halfway around the world. Not such a terrible thing, it seems to me.
NEW YORK - Lobbyists for what could be the first oil refinery built in the United States since the 1970s are seeking help from federal lawmakers to hasten the permitting process, a spokesman for the company hoping to build the plant said on Thursday.
The company, Arizona Clean Fuels, hopes to build a $2.5 billion, 150,000 barrels per day refinery on desert land southwest of Phoenix.
A lack of US refining capacity has been blamed as one reason for higher gasoline prices, which soared to a nationwide record of $2.28 per gallon earlier this month. President George W. Bush, who has seen his approval ratings decline as gasoline prices rise, on Wednesday proposed allowing oil companies to build new refineries at abandoned military bases.
A spokesman for Arizona Clean Fuels said the company was not interested in building on an old military base.
Arizona environmental regulators granted the company hard-sought air permitting earlier this month. This week the company visited Wall Street to seek investors.
Besides financing, the plant still faces many hurdles, including obtaining a permit from the State Department that would allow it to receive crude oil from Mexico by pipeline.
The company also must prepare an environmental impact statement that requires it to determine how the proposed refinery and its daily operation could affect everything from any endangered species to Native American cultural remains.
"We're not asking for special exemptions or variances; we simply ask... could we get some assistance in speeding up that process and streamlining so it doesn't take another five years just to get the permits," said Ian Calkins, spokesman for Arizona Clean Fuels.
Bernake just said this morning that the economy will slow. What that means is that the dollars they have printed are so low in actual value and that prices are so high, the bubble has broke. I am not saying the dollar has no value at all, it has the value that the fed attaches to it. What you need to understand is actual value. Actual value of your labor and how the inflation of the dollar lowers that value. That is how they steal from you.
Now, we slide down, valuating the virtual inflated worth of the virtual inflated dollar towards the depression side. When the dollars value gets to the point that your actual wages, not the inflated aspect of your wages, makes you to expensive, you get laid off. Not you per se but many people will now be losing their jobs.
When prices go up, wages stay the same or maybe a slight increase over years. The inflated dollar causes prices to rise beyond your actual wage.
If you would look at it with an open mind instead of championing what you were told to be true, you would understand and see I am telling you the truth.
But, until you fully understand how money works, everything you state to be a fact is based on inaccurate information, making it mostly false.
Any government that steals their citizens labor is facist. People that are brainwashed into thinking that is ok are fascist with them.
We are now on the downward swing of the fed system when in reality, we still have the same amount of product and services we had yesterday, minus the amount of oil we have used in the last 24 hours. Does that tell you something about manipulation?
Does the fed arbitrarily choose a value to put on the dollar or do they base it on something concrete?
"Throw out all of the current valuation metrics."
That is what I just heard a market anaylist say on Bloomberg. Tell me, has everything we produce in the United States just become worthless? Or, could it be that all these dollars the fed prints are really what is worthless?
I still think the best products in the world are produced here in the U.S. So why does the value suddenly devaluate to the point of recession?
Because someone is squeezing the real value out and putting it in their pockets. That's all I can come up with. If you can give me a better reason then I will consider it. If you really understand how the ecocomy works I will consider it. If you are right I will be thrilled to know that the fed and the government are really looking out for our best intrest.
They base it on their own intrest. Intrest. Pure profit from nothing. If the dollar was backed by gold, they would still print more dollars than gold in the belief that not everyone will redeem them for gold at the same moment. the legal tender laws gave them the right to place a value on a piece of paper. Regardless of what they say is backing it. The corporations own the oil. What does that tell you about politicians and huge corporations?
They base it on their own intrest. Intrest. Pure profit from nothing. If the dollar was backed by gold, they would still print more dollars than gold in the belief that not everyone will redeem them for gold at the same moment. the legal tender laws gave them the right to place a value on a piece of paper. Regardless of what they say is backing it. The corporations own the oil. What does that tell you about politicians and huge corporations?
I see, and how do they convince the rest of the world to accept that value? For instance, how do they convince Japan to accept that dollar value for the automobiles imported?
Don't trifle with me son. You figure it out if you really want to. Otherwise, keep giving everyone your limited view of the world.
What your case lacks in the way of analysis and reasoning, it makes up for in it's vitriol and contempt for any explanation of economic reality that doesn't have a monetary conspiracy as its centerpiece.
Quote:
Originally Posted by magprob
Because someone is squeezing the real value out and putting it in their pockets. That's all I can come up with. If you can give me a better reason then I will consider it. If you really understand how the ecocomy works I will consider it. If you are right I will be thrilled to know that the fed and the government are really looking out for our best intrest.
Will you believe that I really understand how the economy works if I disagree with you? If I tell you I have more than one university degree in Economics, will you dismiss my ideas as elitist propaganda? If I tell you that there are good and sufficient reasons for most of what happens in the world of money and banking, and that the role and function of a central monetary authority is necessary and essential, will you take it as evidence that I've been brainwashed?
You give national governments and central banks way too much credit (no pun intended) for being able to directly influence, much less completely control worldwide economic activity. They're kind of like the Corps of Engineers, building levees and breakwaters in a sometimes desperate and often unsuccessful attempt to protect their shoreline from economic hurricanes and tsunamis that occur frequently, though unpredictably. It's not that they are entirely powerless or that their efforts to influence markets are never successful in the short run. But they are so far from being able to really control everything that the whole idea is laughable. The relative exchange values that are negotiated daily in all kinds of markets--products, services, credit, and currency--are simply the cumulative result of the billions of buying, selling, saving and spending decisions made by billions of ordinary people going about their daily business.
I know, it just doesn't get the juices flowing like a good conspiracy riff, but the truth of how things work isn't necessarily good movie script material.
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