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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (247656)	5/11/2010 1:20:26 AM
From: Secret_Agent_Man	Respond to of 306849

"these people can't continue to rule over america without collapsing our democratic republic." too late- 1913

To: Skeeter Bug who wrote (247656)	5/11/2010 2:34:33 AM
From: roguedolphin	Respond to of 306849

Ron Paul Says It's NOT Too Late To Call Your Senator; Sanders Wimps Out; Paul Backs the Vitter amendment globaleconomicanalysis.blogspot.com Mish

To: Skeeter Bug who wrote (247656)	5/11/2010 9:11:43 AM
From: neolib	Read Replies (1) \| Respond to of 306849

Fundamentally his system does this: 1) Has the market set interest rates, i.e. the price of borrowed money. 2) The market then also sets the price of EVERYTHING ELSE (as it should)in the short term (between money supply updates) 3) Has the all knowing central government compare the market price of EVERYTHING ELSE to the TRUE PRICE OF EVERYTHING ELSE (God provided some means of determining this!) and attempts to force a correction on the market place for getting the prices "wrong" in the short term, thus holding prices "correct" for the long term. This is nuts. Please note this is way different than the current system, because the current system does not, as he states he would, attempt to control the price of most assets (RE, stocks, etc). I'm not saying the currently used methods of computing inflation are "correct" either, but I suspect they are much saner than thinking we can come up with an equation for the "correct" prices of assets. I'm also well aware that markets missprice assets all the time on the short term. I just don't think the central government will do better long term. not if prices don't go up. raises based on merit are real. lately, nobody is getting a raise and inflation plugs along. There is a significant difference between no raises and no inflation and periodic raises that exactly match inflation psychologically. I'm open to the possibility of either being "better". how about debt free money - why should society pay 7-8% on their money supply every year to people who do nothing but log entries in books? Its not debt free money. There is still borrowing and still interest rates. Anytime anyone obligates themselves to pay in the future they are creating money. Why is this so difficult to understand? but that isn't inflation, per se, it is simply a growing economy. you'd grow the money supply to support the growing economy. of course, growing workers mean growing goods to be sold... so there will be some balance there. Reread what I wrote. I'm talking about the intrinsic inflation that occurs from limited resources. Suppose you start out with 1 city, and the population doubles and you add a 2'nd city somewhere else of the same size and with the same distribution of assets, then that would be a growing economy, and his scheme can handle that. What he does not handle is if the first city doubles in size, and as a consequence much of the original assets increase non-linearly in price. We see this all the time when the market gets to set prices. But in his scheme, God is going to correct the market, using the divine price equations (all transparently calculated but still...) Of course he can handwave and say the devine price equations can deal with this... BTW, I'm not in the least defending the current FED/bank structure. I see no reason why we have the tier system and the top banks get to borrow created money and skim off a fraction to distribute it to the economy. I'd be happy with the FED providing the entire function. But that would result in howls of "socialized banking" from well known quarters of the USA.