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Gold/Mining/Energy : ECHARTERS -- Ignore unavailable to you. Want to Upgrade?

To: E. Charters who wrote (3690)	11/22/2011 12:31:44 AM
From: Dirtythirty	Read Replies (1) \| Respond to of 3744

You folks should save all the economic theory for the university lecture halls where it belongs, it is worthless in the " real" world as we know it today which is dominated by political schmucks who manipulate and deceive every facet of life. We are overwhelmed by government and have no one to blame but ourselves.

To: E. Charters who wrote (3690)	11/22/2011 10:09:11 AM
From: grusum	Read Replies (1) \| Respond to of 3744

seems we are going around in circles. if dollars are created in a legit way, there can be no excess in 'supply'. the only time they are in excess is when they have been counterfeited. supply should always be constrained to what is legit. i know what idiots like krugman say about how dollars are created and destroyed, but i don't believe them. i don't believe them because i don't know how the FED works and apparently neither do they. i don't know how many of our dollars haven't been created legitimately. counterfeiting does have an effect. outside counterfeiting is always a problem for any currency. but inside counterfeiting is the real killer. zimbabwe is a perfect example of inside counterfeiting. it's also a perfect example of how growing the money supply has nothing to do with a growing economy. money supply could be fixed and an economy could still grow, but there would be general falling prices levels instead of rising. eventually a smaller value currency would have to be made with a value of fractions of a penny. zeros would have to be subtracted, rather than added. a fiat currency represents the value of labor withing a country. varied taxes and regulations within a country determines labor's value (production minus costs) in that country. that's why each county's currency naturally has a different value. the supply of raw labor doesn't determine its value. its value rests in the sophistication of labor that's allowed in a country. the less taxes and regulations a country has (along with strong property rights), the more value its currency will have. the only other thing that affects a currency is how much counterfeiting is going on. sure, people like gates can spend dollars frivolously. but very few people earn enough dollars to spend them frivolously. and even when they can, it doesn't mean that they will. there are lots of stories about men that were thought to be poor because of their lifestyle, that were in fact found to be quite wealthy when they died. they had many dollars and still were quite thrifty. the conditions within a country does affect the efficiency of its labor, and the efficiency of labor does change in value, but again, it isn't affect by supply. and the efficiency of labor in a country is represented by its currency. the only way to devalue a currency is to counterfeit it. that creates the excess that you talk about, nothing else. counterfeit currency is excess currency. legit currency can never be in excess. labor can never be in excess because no one does it for free. labor always costs, regardless of whether some think it costs too little or too much. regarding gold and silver as currency.. the search is always on for a better currency. but currency is just a medium of exchange to better facilitate trade. production is what enables trade and trade creates wealth. so a real economy rests on production, not its currency, even though theft of the currency can largely destroy an economy. theft of a currency is done more with counterfeiting than robbing of banks. honestly run fiat currencies make the best currency because they are negotiated over a much broader spectrum of an economy than any commodity could be. this makes them more stable and unaffected by forces that can affect any commodity. the problem as always, is how to get an honestly run fiat currency. the big advantage of a metal by weight currency is that it's almost impossible for a government to counterfeit. the big disadvantage of a metal by weight currency is that it can't be as stable as a fiat currency.