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Posted by: tadair919 7 months, 2 weeks ago
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beavith17 months, 2 weeks ago
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a slow economy with rising prices is called stagflation. i lived through that once. don't want to do it again. there are solutions to it, although, with current interest rates so low, the toolbox sin't very full of tricks to reign it in, without some very painful choices. Volcker sent us into the recession of 1981 putting the brakes on M1 growth. the intentional recession (depression?) needed to beat this current thing would be bloody. politically and economically..
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a slow economy with falling prices is new economic territory, requiring new economic theory. let's keep it simple. if i have a job, i'll choose that one. if i don't have a job, it really hurts my chances of getting another one. i wouldn't want that one.
your second choice is like that movie scene you've seen a million times. the hero is sliding down a hill, gathering speed, grasping at whatever he can hold onto, but finding nothing, until he goes over the cliff.-
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tadair9197 months, 2 weeks ago
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with lowering prices, so long as i consistently and efficiently kept getting better and better prices from my vendors, then my company would not be effected by it. merely cut wages to market demand.
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let me say it this way.
in football, would the game change if they changed the scoring system from 3 points a fieldgoal and 6 points a touchdown, to 300 points a fieldgoal and 600 points a touchdown? for that matter, .000003 points, and .000006 points?
nope.-
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beavith17 months, 1 week ago
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actually, that's what happens in hyperinflation when the banking authorities have lost complete control. qv Weimar Republic or Zimbabwe.
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dropping the zeroes is another tactic in hyperinflation to make the currency more convenient to carry, like fit in your wallet, not your wheelbarrow. for as long as that new currency holds some kind of realistic value. the zimbabweans had explosive hyperinflation and lopped off multiple zeroes three times in their current round of economic lunacy. its literally called the Zimbabean Third Dollar. heck. i stopped paying attention. maybe they are on the fourth or fifth dollar. its like watching a train wreck. fascinating and awful.
the Fed had a target of building in 2% inflation per year when times were more congenial. i suppose you could have the Fed say they wanted to build in 2% deflation per year, but they have no known way to control it.
efficiency improvement, with a stable currency, is great for the stockholders because that improvement goes to the bottom line and you see it as equity in the business. efficiency improvemnt in a deflating or inflating economy is a cheat to someone on either side of the equation because the value of the medium of exchange is changing with no regard to input. somebody benefits. somebody gets rooked.
i'm not ballsy enough to demand hard currency like a gold standard because that would be monstrously and immediately deflationary. fiat currency has its problems as long as someone has control of the levers of 'value' and performs as a masterful fiduciary. our current situation hit a singularity and no one has control over anything. the engineers are cranking levers pushing buttons kicking pedals and nothing is working.
wher ewe go from here is anyone's guess. if anyone tells you they know, they are lying.-
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tadair9197 months, 1 week ago
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a gold standard would prevent what happened in zimbabwe.
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and i wasnt suggesting to hyperinflate the money supply by "dropping in zeros" this is an example of inflation.
deflation has the opposite effect. instead if a loaf of bread costing 2 dollars, it costs 1 dollar, then 50 cents, and in extreme hyper-deflation i suppose it could cost 2 cents. (the dollar bills would start looking like 0.000001 cent)
but that would have to come from an unnatural federal reserve mandated policy.
there is no way to do that on our own.
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