My conversation with a couple Keynesians on Facebook

it is like the false left vs. right paradigm. the deflationary gold scam was solved with the inflationary fed scam. now, there is a move to go back to the old scam. you’re given perpetually false solutions by transitioning back and forth between each polar extreme while being continually scammed, just in different ways.

Yesterday at 5:00pm

well said, solve the debt induced inflation from Federal Reserve Illegal Fiat with ferocious deflation from gold convertibility that lead to the Panic of 1837, the Crime of 73′ and farmers committing suicide.

Blissfully ignore history and repeat it.

Yesterday at 5:08pm

It’s comical that various foundation funded institutes and their talking heads associate liberty with a gold standard because their aristocratic masters already *own* most of the gold.

Yesterday at 5:11pm

How can a fiat be neutral? Value of various property compared to each other will always fluctuate. Fiat is a faith based system that has nothing backing it up. I would love to read more about alternate solutions to the fractional reserve banking scam we have been living with. Why should one class of people have the right to counterfeit, and the rest of us cannot?

Yesterday at 5:38pm ·

Fiat can be neutral if there is no debt attached to it. Gold has nothing to do with a currency, the underlying economy does.

Yesterday at 5:40pm

So a transparent production of a known and limited number of tokens to be used in a free market to help merchants and consumers negotiate prices. Is that what you are suggesting?

Yesterday at 5:51pm ·

I am suggesting money be spent debt free into the economy via infrastructure spending as opposed to debt induced lending or borrowing thus making it a permanent part of the monetary supply and representation of monetized wealth.

To avoid inflation merely set a 8-9% expansion cap per year and to avoid deflation by a measure that requires the per capita supply of money never falls (thus guarding against depression-inducing contractions)

Yesterday at 5:56pm

you manage the amount of paper in supply and not attach it to debt. you determine how much to remove and add to supply using very broad price indexes if economic conditions result in broad inflation or deflation. you remove and add by adjusting state revenue/expediture. you can make it transparent and most evenly distributed with a citizen dividend.

Yesterday at 7:45pm

pegging it to a commodity like gold is a bad idea since inflation and deflation is influenced by both broad economic conditions and by the commodity market itself. gold has two edges of volatility.

Yesterday at 7:50pm

yes, you convert existing fed notes for a public note. then, you add and remove on state expenditure. you spend less, you remove. you spend more, you add. a tax system that favors production, labor, investment, savings, and loans, and reduces the cost of living and poverty, like a land value tax, combined with a citizen dividend, is the most even…See More

Yesterday at 7:55pm

yes, darrell, not only transparent but with the rules transparent and rigid. make congress make changes to the rules by the requirement of a constitutional amendment or super majority vote for more fluid issues, such as deficit spending funded with bonds or inflation or changes to price indexes. you just issue tokens, converting existing notes 1 for 1, and you manage the tokens with transparent policy rather than the current system of managing credit supply with interest attached to it.

Yesterday at 7:59pm

super majority like a constitutional amendment, perhaps even with agreement from governors, with full terms of the deficit spending. that should help keep a balanced budget except for real emergencies where it could be justified.

Yesterday at 8:06pm

The major flaw with our current monetary system is that money is created via commercial bank lending the principle thus that amount is reduced from the monetary supply once it is paid back (money is destroyed) adding to the overall indebtedness of the entire society on a massive scale.

The system is naturally deflationary which forces businesses to absorb the higher costs of borrowing money via raising prices and consumers to borrow more money to afford those prices thus creating monetary inflation.

Some insist a business will conveniently lower the price of their goods during a contraction however, reality proves otherwise since the business must meed a break-even point or go bankrupt.
These same people also ignore that employment opportunities are also drastically lower during these contractions while merely looking at the value of the currency in question to do the slow-down in the velocity of money.

Yesterday at 8:07pm

you could do caps the same way… giving the federal government some flexibility in over-spending, but not on the scale of trillions, but a few billion. and if you tie it to a citizen dividend too, the people are going to want the government to underspend rather than overspend if it influences how much they get from the government. the citizen dividend would encourage the end of all state social services. the less state social services, the bigger the dividend for private social services, with the most critical being able to afford your own land and land value taxes or the equivalent for private social services, if you should be disabled. if you’re disabled, family members will be more likely to give you room and board if you have a check coming in.

Yesterday at 8:09pm

good ideas like this tend to get suppressed because they make sense. hard to scam people with good ideas that are fair and work.

Yesterday at 8:11pm

It is utterly shocking how suppressed this has been.

Yesterday at 8:12pm

the inflationary fed was the solution for the deflationary gold. going back to the old problem is not a solution.

Yesterday at 8:13pm

i thought they killed rfk and mlk just because rfk and mlk was going to run for president. it was more than that. mlk and rfk was starting to promote this idea.

Yesterday at 8:14pm

I wasn’t aware of that, however it was refreshing when i found out Dennis Kucinich atleast revived it’s idea in Congress.

Yesterday at 8:16pm

cynthia mckinney even spoke favorably of it. david nolan speaks favorably of it. people in ludwig von mises institute like the ideas, but they propagandize something different.

Yesterday at 8:30pm

I think I am following, please allow me some points of clarification. How is new wealth be brought into the equation? Say I use my issued tokens and buy raw material then use my talents to change it into something very desirable and therefor more valuable. When I attempt to sell it, where is the extra credits coming from for someone to afford my improved product? What about amassing wealth through savings? Since the credits in circulation are monitored, what if everyone decided to save their credits instead of spend them, could the relative value of the credits as a circulating commodity go up simply because of this activity?

11 hours ago ·

“How is new wealth be brought into the equation?”
You would capture part of the money that already exists in the monetary supply – new wealth would be a natural expansion of the monetary supply since generally it only expands when wealth is monetized (for example a mag-lev rail system).

“? What about amassing wealth through savings? ”
The Wealth has to be there first before you can save it because the money reflects the wealth.

11 hours ago

So each year, the old money would stay in circulation and the government would introduce new money according to their spending projects and a per capita distribution? How would the government take money back out of circulation? If I did not spend my yearly tokens could accumulate them for my children when I die? I am trying to work this through and appreciate your patiences with me on this.

11 hours ago ·

“How would the government take money back out of circulation?”
They don’t because each dollar represents physical labor and monetized wealth as opposed to “Promises of future labor”

The government of course would tax, but those taxes would obviously be used to cover whatever expenses and debts the federal government had. “If I did not spend my yearly tokens could accumulate them for my children when I die?”

Of course they are merely going to be dollars like you have now but as opposed to being a usurious debt based system each dollar is a permanent part of the monetary supply.

11 hours ago

Bare with me here, so each year an amount of tokens is added to the economy equal to or greater than the year before? How many years would it take to completely flood the economy with these tokens making their relative value compared to finite commodities like real estate go down? Why wouldn’t supply and demand economics make the value of the growing number of nonparishable tokens diminish? I am asking these questions because like you, I think we can devise a better way to interact with the free market than gold or debt based dollars.

11 hours ago ·

How many years would it take to completely flood the economy with these tokens making their relative value compared to finite commodities like real estate go down? Why wouldn’t supply and demand economics make the value of the growing number of nonparishable tokens diminish?

Population and economy expands, tokens expand.

“The gold standard and the inflation argument that was used to justify it were based on the classical “quantity theory of money.” The foundation of classical monetary theory, it held that inflation is caused by “too much money chasing too few goods.” When “demand” (the money available to buy goods) increases faster than “supply” (goods and services), prices are forced up. If the government were allowed to simply issue all the Greenback dollars it needed, the money supply would increase faster than goods and services, and price inflation would result. If paper money were tied to gold, a commodity in limited and fixed supply, the money supply would remain stable and price inflation would be avoided.

A corollary to that theory was the classical maxim that the government should balance its budget at all costs. If it ran short of money, it was supposed to borrow from the bankers rather than print the money it needed, in order to keep from inflating the money supply. The argument was a “straw man” argument — one easily knocked down because it contained a logical fallacy — but the fallacy was not immediately obvious, because the bankers were concealing their hand. The fallacy lay in the assumption that the money the government borrowed from the banks already existed and was merely being recycled. If the bankers themselves were creating the money they lent, the argument collapsed in a heap of straw. The money supply would obviously increase just as much from bank-created money as from government-created money. In either case, it was money pulled out of an empty hat. Money created by the government had the advantage that it would not plunge the taxpayers into debt; and it provided a permanent money supply, one not dependent on higher and higher levels of borrowing to stay afloat.

The quantity theory of money contained another logical fallacy, which was pointed out later by British economist John Maynard Keynes. Adding money (“demand”) to the economy would drive up prices only if the “supply” side of the equation remained fixed. If new Greenbacks were issued to create new goods and services, supply would increase along with demand, and prices would remain stable. When a shoe salesmen with many unsold shoes on his shelves suddenly got more customers, he did not raise his prices. He sold more shoes. If he ran out of shoes, he ordered more from the factory, which produced more. If he were to raise his prices, his customers would go to the shop down the street, where shoes were still being sold at the lower price. Adding more money to the economy would inflate prices only when the producers ran out of the labor and materials needed to make more goods. Before that, supply and demand would increase together, leaving prices as they were before.”

11 hours ago

you only add if there is economic deflation. it isn’t every year. and it should be managed on a monthly or quarterly basis. more difficult to do such management with a gold standard since you’re having to buy or sell gold.

10 hours ago

not sure the ellen brown argument holds. if supply inreases or demand falls, the pressure would be deflationary, thus, you’d add tokens. if supply falls or demand increases, the pressure is inflationary, which you remove tokens. the changing supply and demand can be from numerous reasons, including population changes, employment, commodity cycles,new technology, etc. the trend would be deflationary largely from growing employment and productivity increases. growing employment can result from increased population though growing population can induce inflationary effects if suppy doesn’t keep up with demand. however, there is a lag in inflationary and deflationary pressures as ellen brown suggested, so simply adding or removing tokens should be done with caution. i’m not sure of the details of issues involved though the fed already does monitor and try to address such issues indirectly with setting the prime rate so i’m sure the science is well understood.

10 hours ago

The Ellen Brown argument merely points out the fallacy of the quantitative theory of money by highlighting that merely printing money is not inflationary so long as the aggregate production output keeps pace with the monetary supply.

10 hours ago

it is correct to say that it is more complex than mere supply and demand. capitalization, savings, loans, and employment are more heavily weighted concerns.

10 hours ago

for example, you can’t correct the problem of an oil shortage causing an inflationary situation in the economy. however, you can correct problems from the other factors causing an inflationary or deflationary influence on the currency, such as population, bank runs, or productivity. it tends to be complex, and you can’t completely do away with inflation and deflation because they serve a purpose to correct markets. however, you can correct broad inflation and deflation caused by other factors.

10 hours ago

meaning, add tokens if there are more people chasing more supply, or remove tokens if there are less people chasing less supply. prices will still increase and decrease and cascade from changing markets. you can’t address that nor do you want to try to address that.

10 hours ago

I am not so sure it’s necessary to remove currency from the system but rather set a cap on the monetary expansion rate depending on the inflation level (if there is inflation)… initially 8 or 9% but if there is indeed an inflationary phase set the cap lower.

Under the advocated system a high inflation rate is very unlikely at a 8 or 9% annual expansion cap thus I’d find it hard to imagine any broad inflation in the first place. I suppose making it a possibility wouldn’t hurt but i don’t see it actually occurring in the first place.

10 hours ago

you’re right. if deflation is the overall trend, you would be adding to supply. if inflation is created, the corrective action would be to reduce expansion rather than reverse it, since the overall trend would correct it.

9 hours ago

a neutral managed fiat is better than i thought. revenue isn’t needed to manage it. you can manage it strictly on the expenditure side.

9 hours ago