/biz/ - Business & Finance

>>12428625
inflation is a consequence of growth

acutally, the majority is retarded, and if the majority won't be motivated by fear, the society might collapse.

>>12428625
Inflation is a consequence of credit (lending money, the time value of money). Without flushing the economy with new money, it stagnates for years or decades and that's much shittier than a 1% yearly inflation.

>>12428625
>thing millennial doesn't understand
>thing about boomers copied from reddit

Does anyone say that? I think the general agreement is that inflation is helpful, but we've had plenty of deflation in the past

>>12428625
>deflation is good. who needs growth anyway? you can just grow potatoes in your backyard and live a simpler life!

Inflation is not the consequence of growth. Only a retard would think that. A growing economy has more output, so if the money supply is held constant, a deflationary bias should actually be the norm.

>>12429021
isnt a growing economy and growth of the money supply linked? economy grows, banks want to lend, banks grow the money supply by lending, so inflation? i dont understand your point of view and want you to explain more

>>12429021

This. Inflation is just something they teach in school in order to trick you into thinking this monetary system is somehow "fair" and "efficient".

>>12428625
Absolutely infuriating

Inflation is a necessary byproduct of avoiding the extreme instability that capitalism had before the post great depression regulatory and policy regime. Before that recessions would happen every other year rather than every 7 to 10 years, and it's these recessions that would prevent inflation from accumulating since they would bring about severe deflation to counter the severe inflation from the up years. All together this meant incredibly severe price changes year to year, plus or minus 15 percent were common.

That said, what makes it a byproduct is the use of debt as a form of stimulus thus increasing the money supply. But this stimulus effect has been facing diminishing returns for the past 50 years.

>>12429199
>economy grows, banks want to lend
why
why would banks want to lend more in a growing economy?
if there was no central bank it would be:
economy slows, everyone puts their money in the bank. Bank has tons of reserves so can't afford to pay high interest on deposits. Lowers rates to encourage people to borrow. The opposite is economy grows, everyone borrows money from the bank, increased demand for loans pushes price of loans up and increases return on deposits

Free market is a much more elegant system than central bank

I agree. That's why we need a central bank to keep interest rates high and inflation absent

Imagine hating America

>>12428625
>>12429669
Oh god just skimming through /biz/ and already we have the economically illiterate lolbertarians. Why don't you and OP go back to your peter schiff podcast or something while the adults are talking?

>>12429021
wut does dat meen anon?

>>12429021
No shit anon that's exactly the problem. In a deflationary situation people will naturally wait to buy stuff later down the line because they know it will cost less, thus demand will collapse and you'll have Japan's lost decade. What's more, it also means that borrowers get fucked because every interest payment costs more in real terms than the last one did. Since investing in new technologies and startups usually requires taking on debt, this can often be a downward pressure on productivity growth too, which is probably it's most deleterious effect.

>>12428625
most americans live paycheck to paycheck and use debt to survive so yes society would collapse without inflation

>>12429021
A deflationary bias would destroy the economy you absolute moron. Everything would lose value, except money, and money would be good for only hoarding.

>>12429715
faith in /biz/ restored

>>12429669
Anon, I don't think you quite understand how banks or recessions work. Yes, some people might transfer in money to bank accounts after selling riskier assets, but the other effect is that recessions increase unemployment and lots of people will have to withdraw their savings to pay for basic necessities. The opposite is also true in growth periods, when more people start to save because they've got a stable income.

Okay you fucking retarded niggerhomos, inflation is bad and deflation is desirable.

Short
https://www.youtube.com/watch?v=KwikXsVwD34
Longer
https://www.youtube.com/watch?v=WL9BHDEf0dI

>>12429771
restricting consumption is good long term
current over consumption will only flue bad practices and debt

>>12428625
yup

>>12428625
>stagnation is good
retard confirmed

>>12429797

>>12429669
>economy slows
>people put their money in the bank
Or you know..... Buy food with it.

>>12429797
>>12429804
>>12429836
It's funny that these two posters are on the same side of this debate, when the logic expressed is completely at odds. Workers, low income and middle class " people are not benefited in any way by deflation because as that video goes to show wages will have to go down with prices anyway.

it's also untrue that money is being printed to fund the federal government, if that were the case we'd see a secular falling interest rate as the national debt increases. On the contrary, we see that interests rates fall when the economy goes down because the goal is to get liquidity to businesses and consumers.

>>12428655
>Keynesian good

>>12428655
no, it's a consequence of printing money out of ass

>>12428669
the actual inflation is more like 5%
our generation is forced into rentcuckery or debt shackles because the jews print money constantly out of thin air

>>12428844
it's only good for people with BS jobs that wouldn't survive otherwise and for the jews that own all the real estate

Printing money is a scam to steal money from people, the rich don't give a fuck because they park their money in real estate but the poor are either directly cucked by inflation or are forced to gamble on the stock market etc and someone always has to hold the fiat bags so even if bob outperforms inflation alice gets double fucked because of that it's a 0 sum game where the rich/jews rake in all the profits while the average citizen gets fucked

>bbut muh deflation bad!!
how about 0 inflation, 0 deflation you stupid cucks? yeah it's called "stagnation" to make it sound like it's something bad, coincidence right?

>>12428625
>t. Maduro

Yes goyim! Yes!


Inflation is good... so good!

>>12429918

>>12429918
.

>>12429918
In the video he says that wages stay the same. It is only the price of raw materials that decreases a lot.

what do you mean with inflation?
the inflation of the currency or the inflation of of goods?
what do you mean with good?
good for who?

>>12429771
>muh slippery slope fallacy

>>12430102
>>12430118
>>12430132
>my autism demands that I blame everything wrong with our system on jewish bankers
pic of /pol/ thread is dumb for one because that conspiracy anon doesn't understand how revenue streams work or what chart he was looking at.
https://www.gao.gov/new.items/d11696.pdf the scribd link he posted, which is dead now, was almost assuredly to this report. He was claiming that it was these numbers that was the amount loaned by the federal government to banks. That's simply not true, this was the liquidity the Fed pumped to banks in the 2008 crisis and US taxpayers aren't on the hook for it in anyway way shape or form. This is especially true considering that the Fed has been making a profit on all the assets it bought up to boost that liquidity. What's more, that report was only created because Bernie Sanders demanded the GAO audit the Fed's emergency lending program.
https://www.forbes.com/sites/traceygreenstein/2011/09/20/the-feds-16-trillion-bailouts-under-reported/#1592667426b0

Yes, the national debt hurts working class people at the expense of the rich because it's the rich who will buy the bonds and get interest payments instead of getting taxed.

We live beneath a ruling class which controls our lives and our system, but you don't need to resort to conspiracy mongering to prove that.

>>12430320
>every goy is equal so what is the problem?

>>12430385
who's discussing equality? This is the most absurd pathology I come across, if you even so mention the rich as a thing in reference to our oligarchy you're just worried about inequality.

If you're insinuating that somehow all our problems would be solved if our ruling class was somehow "less jewish", then you're a moron. Ruling class anglo-saxon whites don't act any different besides the fact that they're more defensive about saying they've earned their giant hoard of cash.

>>12429715
So people only spend on what they need, and stop operating on debt? Consumption & resource depletion reaches an actual sustainable equilibrium? I'm not seeing why you think anything you just posted is a bad thing.

>>12429715
>why would I buy food today when I can wait a year and buy 1.35% more food?
>why would I buy a car today when I can walk everywhere for a year and then save 2% in a year?
>why would I buy an iPhone3 when I can wait 2 years and pay half price once the iPhone4 comes out?
In reality you're a fucking retard

>>12430496
Also try getting any roastie to stop spending money on shoes, purses, wine
Or any normie to wait a year to go to a sports ball game because it will be 1.75% cheaper. Inflation is a fucking jew scam! And everyone touting it is a triple kike!

>>12430320
>A class of rich people coordinate their activities to remain in power.
>No conspiracies

The greatest weakness (well, one of em) of the communist belief system is the inability to attribute agency to individuals & view everything as just "random" social forces.

>>12430320
>In 1933 the United States went into Chapter 11 restructuring, hence bankruptcy. Chapter 11 is a form of bankruptcy designed for corporations, not governments. When this bankruptcy took place our Constitutional Republic was dissolved and replaced with a corporate democracy, social corporate fascism. Our elected representatives became the trustees and the international banksters became the receivers. And of course like every bankruptcy the matter had to be sanctioned through a court, the United Nations Court in fact.
https://fromthetrenchesworldreport.com/the-lie-of-the-us-bankruptcy-of-1933/10758

>>12430457
That's not what happens at all. You look at Japan in its deflationary period and there was nothing sustainable about it, it's still an incredibly consumerist society. What it did do was restrain their growth. You want to deal with resource depletion you have to first work on more efficient technology and sustainable energy, until you do that it doesn't matter what level of consumption you have none of it will be sustainable.

>>12430496
Your car example is probably the biggest one wrong with your supposed critique. If you already own a car and it's getting old it actually does make more sense to wait another year for the price to go down.

>>12430520
You're missing the point anon. Of course conspiracies will exist, though that /pol/ thread screenshot is almost certainly not one of them. The point is that you don't need to resort to conspiracies to show that a ruling class exists. After all, most of the real conspiracies going on aren't the one's you'll hear about on some Indonesian toothpaste enthusiast forum.

>>12430550
>united nations court
>1933

>leaving the gold standard
>bankruptcy
lol

come on anon, this is so low effort it's embarrassing.

>>12430591
Unsound money is the cause of all problems. Keynesians just ushered in the age of inflation after WW2, where economic policies previously only used during war times became the norm. Low interest rates and printing more money was to fund wars, but now it's being used for economic policies when we're not at war. Soon the system will collapse, and if your wealth is only in fiat, you will be living on the street, guaranteed.

also >>12430049

>>12430613
It's hilarious that you take issue with artificially low interest rates when the meme you posted is mad that the US tax payer is on the hook for paying that interest.

Capitalism wasn't all hunky dory before 1930. Recessions happened every other year and prices fluctuated wildly from year to year. It was this capitalism, capitalism with a gold standard, that Marx wrote and directed his whole critique against. It was this period when the agitating and resentment against capitalism was at its peak.

Yes, the system will collapse, as I've mentioned, because debt is getting diminishing returns as a stimulant for the economy. But you can't pretend that the transition to debt money was anything other than a historical necessity for capitalism to survive.

If your wealth grows, that's bad for you goy. Look economy is very complicated, it just has to be this way. Buy, spend, work, consume, that's what keeps the economy going. If you don't work and start to read too much, spend time with family, like (((we))) do, you might just learn how the system works and refuse to partake in it. You might improve spiritually, intellectually and physically. That will make a bad goy. Work to keep busy and distracted. Don't forget to pay your taxes, your fines and most importantly always listen to the state, they know whats best for you.

(((We))) have and suppress technology that would require you don't do much work, or any.

>>12430680
Why is it that the US has never suffered a financial crisis in the 19th century during the period when there was no central bank, except in the two instances when Congress had directed the Treasury to act like a central bank: during the Civil War with the printing of the greenbacks, and in 1890 after the monetization of silver? How did the US manage one of its longest periods of sustained economic growth without any financial crises between 1873 and 1890 when there was no central bank at all, and the money supply was restricted, and the price level continued to drop?

>>12430733
All of that's dependent on what you call a financial crisis. In the 19th century runs on the bank occurred all the time. Those are quite rare in our current system. In some ways you can say we've exchanged bank run risk for financial crisis risk by ensuring deposits and increasing liquidity.

And yeah, developing countries tend to grow much faster than developed country. The US was still a developing country in the 19th century.

>>12430769
Bank runs like what's happening in France is not considered or in Greece a few years back? How about 1929? After the introduction of the Federal Reserve in 1914, they started printing more than they had, effectively debasing the currency. This was done even more after WW2 until Nixon defaulted on the gold standard, and made it obsolete. Based on empiral data, the monetary system changes every 30-40 years. 2008 was THE end to the system, but with QE they kicked it down the road. It will come again, but this time when they try QE to stop it, it won't work, and will lead the $ in a hyper inflationary spiral. Also, things like Glass Steagle would prevent bank runs.

>>12430769
>Number of countries having a banking crisis in each year since 1800.

>>12430733
>what are the like 10 notable panics in the late 1800's?

>>12430811
>Bank runs like what's happening in France is not considered or in Greece a few years back?
I was referring to the American system, anon. The Euro and gobal debt markets is a whole other can of worms. Historically, the most developed countries have done their best to get as much debt squeezed out of smaller less developed countries, even organizing banks to do so. Hence the US organizing the western response to the Latin American Debt Crisis, and Germany organizing the European response to the Greek debt crisis.

>1929
The FDIC hadn't been created yet, nor the policy of decreasing rates to stimulate the economy. In fact, interest rates were largely stable from the period before the Fed and after, with the ten year treasury always holding 3-4% from the 1910s to the end of the 30s.

> 2008 was THE end to the system, but with QE they kicked it down the road. It will come again, but this time when they try QE to stop it, it won't work, and will lead the $ in a hyper inflationary spiral.
QE kicked plenty of stuff down the road, but that's neither here nor there. The system will fail, as all systems fail, but the monetary system only changes to cover underlying issues which cannot be resolved.

>>12430893
The post-war period was great, economically, yeah. A lot of that was the growth from rebuilding, the regulated stability of the post-war period, and bretton woods gets some credit to. But Bretton woods wasn't sustainable, if the French went through on their promise to exchange all their dollars for gold it would have been done one way or another.

>>12430901
>With the single exception of the 1893 panic, pre-1914 banking panics were restricted mainly to the New York money market with relatively few bank suspensions in the rest of the country. Yet there were nonnegligible national effects in some instances on the money stock. Effects of panics on expenditures and overall economic activity have been more difficult to measure.
https://eh.net/encyclopedia/banking-panics-in-the-us-1873-1933/

>>12430945
So what exactly do you stand for? I stand for sound money and free markets. Obviously there should be sensible regulation like Glass Steagle and derivatives should probably be banned.

>>12430972
I stand for economic development, wherever that may lead. Debt based money came from necessity, and so will what comes next. What that is will be determined by the nature of the crisis that debt money cannot overcome.

What I'm against is nostalgia for past systems as if they hold the key for a perfect future.

>>12428655
>the economy never grew, not even once, in the thousands of years up until gold standard was abandoned
Your time is almost up

>>12430990
When comparing depressions to periods of the gold standard, it must be remembered that the gold standard in Europe and the US in the 19th century was far from perfect form of sound money, as there were several flaws in it, most importantly, that banks and governments could often expand their supply of money and credit beyond the gold held in their reserves, causing booms and busts similar to those seen in the twentieth century, though to a much lesser degree.

Think about the current banking system.
>Deposit money
>90% loaned out without your knowledge
>money loses value because of the fed's inflation
>working class loses purchasing power, banker class gains purchasing power (not producing anything for the economy).

A good way to fix the current banking system
>Banks cannot loan out customer money
>Inflation does not exist
>The fed is controlled by the people

A bitcoin system would have those features.

>>12431019
That deposits are loaned out is how banks make a profit. Also, while they are relatively new, there are savings bond accounts with the treasury that have their value tied to inflation.

That bankers and all owners of business gain purchasing power is a given in capitalism, this is the very nature of accumulation.

>>Banks cannot loan out customer money
Then loans would only be made on a purely speculative basis with money being created /completely/ out of thin air. Loans being made with deposits only is a much more secure kind of banking, i.e., full reserve banking, is much more secure than our current fractional reserve banking.
>>Inflation does not exist
Inflation does naturally occur sometimes anon, including by supply side shocks.
>>The fed is controlled by the people
>>A bitcoin system would have those features.
The whole point of bitcoin is that it can't be controlled by anyone, that includes "the people". What's more, I don't see any chain of events that transport bitcoin from being a volatile investment asset to a currency. If it retained that volatility as a currency the menu prices would be enormous.

If you want some policy prescriptions then fine, I'll give em.
>Replace for-profit banking with non-profit credit unions
>create a public option with brick and mortar access in post offices and an easy to use online portal
>public option has savings accounts tied to inflation so they can't lose value ( a more liquid kind of I series account, but perhaps not as liquid as a regular savings account)
>Increase real wages and focus on lowering costs of basic necessities

>>12429918
Rewatch 6:40-7:50 in the first video.
>video goes to show wages will have to go down with prices anyway.
This is correct.
Nominal wages do go down.
Nominal prices also go down, but nominal prices go down faster than nominal wages. Thus, real wages rise.

>>12429715
Thank god some people here aren’t retarded.

>>12431366
Then real profits would also be falling, and as much as that'd make me happy, capitalists don't tend to stand for such situations long.

>>12429918
>Workers, low income and middle class " people are not benefited in any way by deflation
In fact, it's these very people who benefit most from deflation, bearing in mind that we expect increased spending power.

Suppose you see inflation, which is the same as saying you see reduced spending power.
When a rich person is faced with reduced spending power, he simply reduces his discretionary spending.
But a poor person, when faced with reduced spending power, often has no discretionary spending to reduce in the first place and must further reduce his standard of living.

>>12431410
>Then real profits would also be falling
What are you talking about?

>>12430132
Your pic related is incorrect. Unelected bureaucrats wield far more power than elected officials and have more money and job security. If you want to know who really governs a modern country, look at who heads the major public institutions (obviously these officials are still subordinate to bankers etc)

>>12431434
All this assumes, for 1, that the deflation is the result of growth and not a fall in demand. 2, the monetary policy of Reagan and Thatcher was specifically done to cut down inflation by raising interest rates, this hurt workers most because of the falling unemployment and the recession it induced. You should have no illusions here, Volcker's aim was to restrict the money supply, and that's exactly what you'd need to do in order to get the deflation you want.

>>12431479
Profits for a given good are equal to the price of that good minus the costs of production. If the price of the good is falling faster than the input prices, then profits are going down.