Thread: Каддафи хотел заменить доллар золотом

Originally Posted by Crocodile

... the absolute value of the public markets is still growing making the public richer. So, the fiat currency makes that happen faster than the backed currency. What do you think of that?

It appears that perhaps I haven't made clear the significance/ramifications of debt deflation.
Perhaps we could liken the situation to public health. Centuries ago we did not know what were the causative agents responsible for cholera, plague, yellow fever, polio etc. But people gained more and more knowledge about these kinds of things until the 19th and 20th centuries when it became possible to prevent many such things by having sanitation laws, clean municipal water supplies, medical support treatments, etc. We know now what to do in many such cases to reduce the incidences of various diseases, not all of them of course, but huge strides have been made.
Likewise in finance, we know what causes a great many problems, but we let the disease , the dysfunctional agents, actually run things. We know how to prevent problems. Enough is known, but crazy doctrines are promulgated, like false religions, leading people over the cliffs. If you want medical care, you know who to go to. If you want economic health do not go to economic witch doctors.

Maybe this can help you see the tip of the iceberg: http://www.zerohedge.com/article/ecb...ean-central-ba

Originally Posted by Seraph

If you want economic health do not go to economic witch doctors.

Yes, that sounds reasonable. The only problem is that there seems to be no mutual agreement as to what evil is lesser at each point in time. Say, you're a government and you want to reduce the deficit. One of the simple and clear recipes is to cut the spendings. And one of the major annual bills is the payment to the government-supported unprofitable enterprises. So, you stop paying those enterprises which would effectively have those enterprises closed and the employees fired. But, hey, you have the lesser bills to pay. Yay! Right? Not quite. As a government, you have the further responsibility to provide social security to those people paying them money directly and at the same time you have less tax revenues coming as well as less GDP produced to back up your currency. So, in the end you'll have to pay even bigger bills than before. So, which evil was the lesser at that point? Alternatively, you might decide not to cut the deficit that way, but you have to cut it somehow or borrow even more, right? And the problem is that almost each and every measure of the deficit cut creates some well-known adverse side-effects which come and bite you from behind. So, using your analogy with the health providers, if you have a headache you can take the pill and the headache will go away, but the pill would hurt the liver. Of course, you might do lots of outdoor sports and you won't ever have headaches, but that's not easy too: because of your busy schedule you would have to sacrifice some quality time with your wife and kids, so your wife might leave you for someone else "who cares" and your kids would grow up and won't care about you as you've "never been there for them". And so on...