Hyperinflation

[thatonethere]

The American dollar is losing its value faster and faster. Pretty soon, we'll get to experience this:

[url="http://www.youtube.com/watch?v=eZA0qNsf4m0&feature=pyv&ad=3723781624&kw=dollar"]http://www.youtube.c...81624&kw=dollar[/url] Edited December 14, 2009 by thatonethere

[Dr. B]

please tell me you aren't serious.

I get my economics information from The Economist, Textbooks, CNBC, The WSJ, and several other media - none of which include shock propoganda youtube videos.. On account of this and my academic credentials I feel I am qualified to tell you that this video is bullshit. The Federal Reserves actions in coordination with the Treasury dept's hold no candle to the factors potentially affecting the value of the US dollar. Additionally, if you're at all familiar with the quantity theory of money (Milton Friedman anyone?) you'll know that INFLATION IS STRICTLY NOMINAL - ESPECIALLY WHEN HYPE PROPOGANDA LIKE THE VIDEO YOU POSTED RAISES PEOPLE'S EXPECTATIONS OF INFLATION, EFFECTIVELY DECREASING THE CAPACITY FOR TURMOIL IN THE SHORT RUN, THE ONLY PERIOD DURING WHICH WE ARE POTENTIALLY AFFECTED.

We are not Zimbabwe, we are not Argentina, we are the world's economic superpower! There's a reason countless nations peg their currency to our dollar! We don't have a fixed exchange rate, we don't monetarize our debt, and we will not suddenly find our farmland, industrial sectors, service sectors, and technology worthless because of the value of our dollar. Trade balance? yes - potentially. Real facets of GDP? No.

Within the first 2 minutes that video was talking about going to war because of this. Please... just... stop. Just stop now.

[Rani]

I'm not an economist, but I've heard these scare tactics several times in my lifetime. Not once has it come to fruition. I sincerely doubt it's going to happen this time either.

'Rani

[thatonethere]

[quote name='Dr. B' date='14 December 2009 - 09:37 AM' timestamp='1260808625' post='438875']
[b]please tell me you aren't serious.[/b]

I get my economics information from The Economist, Textbooks, CNBC, The WSJ, and several other media - none of which include shock propoganda youtube videos.. On account of this and my academic credentials I feel I am qualified to tell you that this video is bullshit. The Federal Reserves actions in coordination with the Treasury dept's hold no candle to the factors potentially affecting the value of the US dollar. Additionally, if you're at all familiar with the quantity theory of money (Milton Friedman anyone?) you'll know that INFLATION IS STRICTLY NOMINAL - ESPECIALLY WHEN HYPE PROPOGANDA LIKE THE VIDEO YOU POSTED RAISES PEOPLE'S EXPECTATIONS OF INFLATION, EFFECTIVELY DECREASING THE CAPACITY FOR TURMOIL IN THE SHORT RUN, THE ONLY PERIOD DURING WHICH WE ARE POTENTIALLY AFFECTED.

[b]We are not Zimbabwe, we are not Argentina, we are the world's economic superpower! There's a reason countless nations peg their currency to our dollar! We don't have a fixed exchange rate, we don't monetarize our debt, and we will not suddenly find our farmland, industrial sectors, service sectors, and technology worthless because of the value of our dollar. Trade balance? yes - potentially. Real facets of GDP? No.
[/b]
Within the first 2 minutes that video was talking about going to war because of this. Please... just... stop. Just stop now.
[/quote]

Okay, I won't tell you if I'm serious or not.
True, we aren't any of those countries, but more and more people are gardening because prices are high. I saw a 1lb bag of beans for $2.99. This wasn't a high end store where I saw the beans, in fact, it was a busted down store that sold irregular items.

I have a brother in law who is an economist. He was able to sucessfuly predict when the housing bubble would burst, the increased rate of gold and silver, and the increase in food prices. We'll wait and see if another war pops up, and we'll see how "jobs will be created". You can call "bullshit" if you want. I'll admit, the music throughout the video would make it hard for someone to take it seriously, but wait and see. The exact events might not happen, but similar things will. I bet nobody thought there would be mass unemployment, tent cities in California, and people lining up to get a job at the new In and Out burger in Orem Utah because there aren't any jobs available to meet their qualifications. I have a friend who was making salary at his old job. He got laid off and now he's a entry level cook, flipping burgers at Chili's because there wasn't any work available. Another person I know worked in the collections department at several banks over the course of many years. Now she's a cashier at the supermarket.

I bet you didn't see things like that coming, did you? I saw it before it happend. When the housing bubble was at its peak, I knew something was wrong. in 2004, I knew mass forclosures would happen, and that the value of the dollar was going way down. Our dollars don't buy much anymore. You know something is wrong when you have to pay $120,00 for a house with 2 bedrooms and one bath. Or the home listing indicates the house has 5 bedrooms, but there are actually 3 of them. Is this a coincidence? I think not.
Something is rotten in Denmark, and I was able to see it before everybody else. You may think stuff like this mentioned won't happen, but give it some time. The US may not turn into Zimbabwae, or Argentinia, but things will definitely get worse.

I bet you thought we'd win the "war on terror" too, simply because we are the "world's superopwer". Why are we still fighting that war then?
Also, didn't the great depression end after we entered world war 1?

[f22a4bandit]

[quote name='thatonethere' date='14 December 2009 - 08:45 PM' timestamp='1260845152' post='439054']
I bet you thought we'd win the "war on terror" too, simply because we are the "world's superopwer". Why are we still fighting that war then?
Also, didn't the great depression end after we entered world war 1?
[/quote]

The great depression didn't end until after World War 2, not 1, just pointing that out.

Also, the "War on Terror" is not a war you can win, and anyone who thinks so needs to get their head checked out. How do you win a war on terror when you can't pinpoint every terrorist cell in the world?

As for economics and our superiority in other fields, we're slowly seeing our time as the sole hegemonic power diminish. I'd also like to see what "new jobs" we'll be creating soon.

[Dr. B]

[quote name='thatonethere' date='14 December 2009 - 08:45 PM' timestamp='1260845152' post='439054']
[quote name='Dr. B' date='14 December 2009 - 09:37 AM' timestamp='1260808625' post='438875']
[b]please tell me you aren't serious.[/b]

I get my economics information from The Economist, Textbooks, CNBC, The WSJ, and several other media - none of which include shock propoganda youtube videos.. On account of this and my academic credentials I feel I am qualified to tell you that this video is bullshit. The Federal Reserves actions in coordination with the Treasury dept's hold no candle to the factors potentially affecting the value of the US dollar. Additionally, if you're at all familiar with the quantity theory of money (Milton Friedman anyone?) you'll know that INFLATION IS STRICTLY NOMINAL - ESPECIALLY WHEN HYPE PROPOGANDA LIKE THE VIDEO YOU POSTED RAISES PEOPLE'S EXPECTATIONS OF INFLATION, EFFECTIVELY DECREASING THE CAPACITY FOR TURMOIL IN THE SHORT RUN, THE ONLY PERIOD DURING WHICH WE ARE POTENTIALLY AFFECTED.

[b]We are not Zimbabwe, we are not Argentina, we are the world's economic superpower! There's a reason countless nations peg their currency to our dollar! We don't have a fixed exchange rate, we don't monetarize our debt, and we will not suddenly find our farmland, industrial sectors, service sectors, and technology worthless because of the value of our dollar. Trade balance? yes - potentially. Real facets of GDP? No.
[/b]
Within the first 2 minutes that video was talking about going to war because of this. Please... just... stop. Just stop now.
[/quote]

Okay, I won't tell you if I'm serious or not.
True, we aren't any of those countries, but more and more people are gardening because prices are high. I saw a 1lb bag of beans for $2.99. This wasn't a high end store where I saw the beans, in fact, it was a busted down store that sold irregular items.

I have a brother in law who is an economist. He was able to sucessfuly predict when the housing bubble would burst, the increased rate of gold and silver, and the increase in food prices. We'll wait and see if another war pops up, and we'll see how "jobs will be created". You can call "bullshit" if you want. I'll admit, the music throughout the video would make it hard for someone to take it seriously, but wait and see. The exact events might not happen, but similar things will. I bet nobody thought there would be mass unemployment, tent cities in California, and people lining up to get a job at the new In and Out burger in Orem Utah because there aren't any jobs available to meet their qualifications. I have a friend who was making salary at his old job. He got laid off and now he's a entry level cook, flipping burgers at Chili's because there wasn't any work available. Another person I know worked in the collections department at several banks over the course of many years. Now she's a cashier at the supermarket.

I bet you didn't see things like that coming, did you? I saw it before it happend. When the housing bubble was at its peak, I knew something was wrong. in 2004, I knew mass forclosures would happen, and that the value of the dollar was going way down. Our dollars don't buy much anymore. You know something is wrong when you have to pay $120,00 for a house with 2 bedrooms and one bath. Or the home listing indicates the house has 5 bedrooms, but there are actually 3 of them. Is this a coincidence? I think not.
Something is rotten in Denmark, and I was able to see it before everybody else. You may think stuff like this mentioned won't happen, but give it some time. The US may not turn into Zimbabwae, or Argentinia, but things will definitely get worse.

I bet you thought we'd win the "war on terror" too, simply because we are the "world's superopwer". Why are we still fighting that war then?
Also, didn't the great depression end after we entered world war 1?
[/quote]

I don't understand the point of your post. The microeconomic coordination of a multitude of firms are a helluva lot harder to predict and analyze than the macroeconomic forces at work here. What we're talking about is the relation of a small handful of meaningful governmental and banking authorities cooperating to achieve certain outcomes. In essence, you're asking me to juxtapose the scripted actions of a handful of bankers and legislators, which are extremely robust and insensitive to external shocks and almost immaculately predictable by economic theory, against the investment strategies of corporations and independent businesses and people with little foresight beyond their own goals. Really the only thing that has happened is that businesses, regarding their concerns for reinvesting their profits into areas besides internal growth and expansion, have gotten too accustomed to the model of debt-financing we have come to enjoy over the last decade. But what happened? The people in the know decided to pawn off their ownership, ie: anticipated receivables, of lended money to the less educated. Yes, every economist saw it coming. Unfortunately, the people working under microeconomic efficiently standards failed to take a step back and say "wait, what if this isn't viable?" - again taking for granted the liquidity of financial markets and derivative, dilutive, and other securities. So what happens? The people working under macroeconomic assumptions: the Fed and other central banks; knowing that their theory depended on microeconomic assumptions of efficiency, had to scramble to correct their models, to readjust for the incapability of individuals and businesses to define risk. There's a reason Bernanke is being so hush-hush about the whole bailout and stimulus effort: It's because he doesn't want to skew expectations about the market in such a way that people trying to "outsmart" the system end up fucking it up again.

Back to my point: "Inflation is and will always be a monetary phenomenon". Anticipating inflation is a good thing in this case because on the one hand, the extra constriction of the financial markets caused by anticipated inflation (nominal interest rate is the real interest plus anticipated inflation) will stop the kinds of things you think are gonna happen; while the expectations of inflation cause employers and other wage payers to settle with employees regarding their salaries with regards to a changing consumer price index.
This is by no means a comprehensive evaluation of the state of our economy present and future.

Calm down, put away the tin foil hat. Edited December 15, 2009 by Dr. B

[Dr. B]

I'd like to add that I don't appreciate you (thatonethere) addressing "you" in the context of your posts. Whether it is me or no, you're coming off as incredibly condescending with statements like "I bet you didn't see that coming" or "I bet you thought...". Wanna play arrogant? So far I've failed to link to a youtube video with little substance beyond quotes and figures taken out of context and have substantiated my opinion with decent, albeit incomplete, explanations (But I'll teach you if you want). You have a brother in law who is an economist and no explanations (minus said youtube video).

Let's tango.

P.S. What does the war on terror have to do with anything? Edited December 15, 2009 by Dr. B

[thatonethere]

[quote name='Dr. B' date='14 December 2009 - 09:30 PM' timestamp='1260851459' post='439091']
I'd like to add that I don't appreciate you (thatonethere) addressing "you" in the context of your posts. Whether it is me or no, you're coming off as incredibly condescending with statements like "I bet you didn't see that coming" or "I bet you thought...". Wanna play arrogant? So far I've failed to link to a youtube video with little substance beyond quotes and figures taken out of context and have substantiated my opinion with decent, albeit incomplete, explanations (But I'll teach you if you want). You have a brother in law who is an economist and no explanations (minus said youtube video).

Let's tango.

P.S. What does the war on terror have to do with anything?
[/quote]

[b]"please tell me you aren't serious.

I get my economics information from The Economist, Textbooks, CNBC, The WSJ, and several other media - none of which include shock propoganda youtube videos.. On account of this and my academic credentials I feel I am qualified to tell you that this video is bullshit."

[/b]And this wasn't arrogant??? This is what started the whole "playing arrogant " thing. I mentioned the war on terror because that thought pattern is the exact same thought pattern that links to assuming that anything can't happen to us because we are a "superpower". You basically decided to shit on my whole argument because of your apparently superior sources of information. Of course the Wall street journal, The Economist and CNBC can and will tell you exactly what they want you to hear. It is the media after all. I'm not saying that the single you tube video would be the go to and end all of information. That's just silly. And then you told me to take off the tin foil hat?! Talk about insulting. Oh. Go ahead and"teach me", since you know so much about the current state of the United States currency, "Dr." Edited December 15, 2009 by thatonethere

[Dr. B]

I made a claim to the superiority of my sources of information because they, unlike a single youtube video, deliver isolated analysis of different facets of the state of our economy. If they want to run an expose on any one thing in particular, fine - but at least I can contrast one single medium's portrayal of events against an other's. Concurrently, there is no reliable source of information regarding economic development/growth besides what national beaurous release to the public, none of which were cited in the video. Arrogant might not be the right word to evaluate my criticism of a youtube video... try skeptical. Telling me that my souces "tell you exactly what they want you to hear. It is the media after all." is absurd because your source of information (single) is "the media" just the same.

The video makes no analysis of international financial markets aside from some people telling you that "countries will not accept US dollars"; which is a lie. I guess my anger stems from that fact that the models constructed to analyze trends in international finance are not complex, but instead of utilizing them the video just wants you to take their information as granted. Additionally, there is practically no such thing as an event in isolation when determining macroeconomic conditions. There's a handful of models involved in any decent analysis, all of which lead to further confounding discoveries. There's an old adage: "There are as many answers as there are economists". This is of course because quantifying the situation at hand requires a significant amount of speculation. That is not to say that I am steadfast in my opinion without significant emperical evidence, it is to bring to light the importance of evaluating a multitude of sources and conclusions when constructing a hypothesis. Not only have I been exposed to detailed explanations of other economist's interpretations of certain variables in collusion, but I have worked hard to understand the mechanisms that govern behavior and the interaction of players on the world stage, including the ramifications of having a fiat currency system based on good faith and credit.

This is the basic science of discrediting your source (single). I'll move on to the economics of money, banking, and financial markets as well as macroeconomic theory in time. And yes, I do wanna play arrogant now.

[Charley]

I want the last 30 minutes of my life back.

that was idiocy at its best in an attempt to get us to invest in gold and silver.

it only focused on one part of the whole boo hoo a coke dosen't cost a nickle anymore? I dont know about you but i would rather earn my $15 an hour and pay a dollar for a coke then only earn 15 cents and pay a nickle. (by the way notice something there? for one hour of work i can buy 15 cokes where as in my grandfathers day one hour of work he could only buy 3.) I am sorry for over simplifying this but i want you to understand. we have more disposable cash now then our parents had and they had more than your grandparents.

now as for the video calling the Chinese "dumb" for lending us money. what the hell they know there economy is dependent on us if we can not afford to buy there goods then there economy crashes far worse then ours ever would.

things are going to get worse before they get better but there not going to get that bad. we have become a nation of ppl who think they deserve something because they want it instead of a nation of ppl who think they deserve something because they earned it.

now I dont trust mainstream news i prefer independent news but when you get info from them you have to use your head still dont just take what they say blindly.

I bet your one of those ppl who think Obama dosen't have a birth certificate because the document says certificate of live birth instead.
use your head instead of just running your mouth spewing out "info" that others want you to spew without knowing what they are even making you say.

[TheScotsman]

Metals are good.

I bought pandas, rubies and krugs (a few leaves too, but no US minted coin Not a tinfoil hat reason, I just think they are fugly) with every cent I had available could back when spot was around the 288-350. Investing in metal is never an unwise move.

Dollar is a shaky item these days, not as bad as they are making it out to be, but it would appear the perfect storm could make it worthless (more or less). I do think it would take a combination of public announcement of divestment on the part of China, (a move that makes very little sense, unless they WANT to loose their investment) switching to a basket currency for oil, and/or a morning star downgrade. Unfortunately, IMNHO opinion any one would trigger the others. In a world of 0% returns on Treasuries, and a net long that drops off faster than the washington monument, it's not a good condition. I agree with Charlie, we are a country of fools that make very few products, and have to buy everything we think we want on credit. There is a price to pay for that stupidity. Unfortunately, at some point it's gotta be paid back... sorta like my neighbor who kept refinancing, and sucking every penny of bubble-equity out of his home, then when he found himself upside down to the tune of around 300K, he walked away. Not sure how we, as a nation, collectively walk away though.

On the other hand, at this rate of gov't spending, the interest alone on the federal debt will exceed GDP in short order. Once the fed debt hits 40-45% of GDP all bets are off, the dollar fails, no question about it.

[thatonethere]

[quote name='thatonethere' date='15 December 2009 - 01:26 AM' timestamp='1260865609' post='439157']
[quote name='Charley' date='15 December 2009 - 12:01 AM' timestamp='1260860465' post='439143']
I want the last 30 minutes of my life back.

that was idiocy at its best in an attempt to get us to invest in gold and silver.

it only focused on one part of the whole boo hoo a coke dosen't cost a nickle anymore? [b]I dont know about you but i would rather earn my $15 an hour and pay a dollar for a coke then only earn 15 cents and pay a nickle. (by the way notice something there? for one hour of work i can buy 15 cokes where as in my grandfathers day one hour of work he could only buy 3.) I am sorry for over simplifying this but i want you to understand. we have more disposable cash now then our parents had and they had more than your grandparents. [/b]I can agree with this, and this is true.

[b]now as for the video calling the Chinese "dumb" for lending us money. what the hell they know there economy is dependent on us if we can not afford to buy there goods then there economy crashes far worse then ours ever would.[/b] True, the actions of China doesn't make sense, but the videomakers did discredit themselves for calling the Chinese "dumb". But what could happen if we were unable to pay them back?

[b]things are going to get worse before they get better but there not going to get that bad. we have become a nation of ppl who think they deserve something because they want it instead of a nation of ppl who think they deserve something because they earned it.[/b] I can agree with this as well.

now I dont trust mainstream news i prefer independent news but when you get info from them you have to use your head still dont just take what they say blindly.

[b]I bet your one of those ppl who think Obama dosen't have a birth certificate because the document says certificate of live birth instead.
use your head instead of just running your mouth spewing out "info" that others want you to spew without knowing what they are even making you say. [/b][img]http://www.hookahforum.com/public/style_emoticons/default/rofl2.gif[/img] Nope. Not even close. It was a nice attempt to put me in a box though. [/quote]

The video focuses on what "could" happen if things got worse, assuming they did. Nobody knows if it is really possible for them to get that bad. Scottsman hit the nail on the head regarding the issue. He took the conversation in the area I was hoping it would go, but it turned into something else. Thanks The Scotsman for bringing the whole debate in a better direction.
[/quote]

[thatonethere]

[quote name='thatonethere' date='15 December 2009 - 01:35 AM' timestamp='1260866125' post='439160']
[quote name='thatonethere' date='15 December 2009 - 01:26 AM' timestamp='1260865609' post='439157']
[quote name='Charley' date='15 December 2009 - 12:01 AM' timestamp='1260860465' post='439143']
I want the last 30 minutes of my life back.

that was idiocy at its best in an attempt to get us to invest in gold and silver.

it only focused on one part of the whole boo hoo a coke dosen't cost a nickle anymore? [b]I dont know about you but i would rather earn my $15 an hour and pay a dollar for a coke then only earn 15 cents and pay a nickle. (by the way notice something there? for one hour of work i can buy 15 cokes where as in my grandfathers day one hour of work he could only buy 3.) I am sorry for over simplifying this but i want you to understand. we have more disposable cash now then our parents had and they had more than your grandparents. [/b]I can agree with this, and this is true.

[b]now as for the video calling the Chinese "dumb" for lending us money. what the hell they know there economy is dependent on us if we can not afford to buy there goods then there economy crashes far worse then ours ever would.[/b] True, the actions of China doesn't make sense, but the videomakers did discredit themselves for calling the Chinese "dumb". But what could happen if we were unable to pay them back?

[b]things are going to get worse before they get better but there not going to get that bad. we have become a nation of ppl who think they deserve something because they want it instead of a nation of ppl who think they deserve something because they earned it.[/b] I can agree with this as well.

now I dont trust mainstream news i prefer independent news but when you get info from them you have to use your head still dont just take what they say blindly.

[b]I bet your one of those ppl who think Obama dosen't have a birth certificate because the document says certificate of live birth instead.
use your head instead of just running your mouth spewing out "info" that others want you to spew without knowing what they are even making you say. [/b][img]http://www.hookahforum.com/public/style_emoticons/default/rofl2.gif[/img] Nope. Not even close. It was a nice attempt to put me in a box though. [/quote]

The video focuses on what "could" happen if things got worse, assuming they did. Nobody knows if it is really possible for them to get that bad. Scottsman hit the nail on the head regarding the issue. He took the conversation in the area I was hoping it would go, but it turned into something else. Thanks The Scotsman for bringing the whole debate in a better direction.
[/quote]
[/quote]

I have metal as well, and I dont think it was a bad investment. In fact, it has already broke even. It won't be long before the ideal spot price comes along. Silver is almost at 18.00/oz. I'm hoping it'll reach $20.00

[Dr. B]

The funny thing about interest payments on national debt is that they are dollar denominated - explicitly nominal. If our dollar devalues our exports become more available, our debt burden is alleviated (reverse Fisher effect) and our capacity to acquire imports diminishes. All good things as far as the nation is concerned. Though the import situation is tricky, I for one believe we have high enough propensity for domestic forward industrial linkages and that we have never become dependent on important substitution industrialization practices. What we can expect to see compounding the interest rate is a flood of dollars to nations we are indebted to that have fractional reserve requirements (china), effectively giving them a big middle finger in the short run before the shortage of dollars (if we give them US dollars while they have to keep some percentage in reserve) will constrict markets in the variable scheme of things, so that when China reacts by a) lowering reserve requirements the interest rate/exchange rate floats down to a long-run equilibrium level or b ) when they increase their reserve rate to account for the depreciation of the dollar, our ability to purchase imports rises again and we're back to square one with our high dollar value.

China is not foolish, they are playing the game with textbook economics - but we are not foolish either, and we the citizens must understand what matters of international financial economics are either out of our hands or actually matter. Charley had the right idea with what I was saying earlier, but I'll sum it up again. In the long run, all wages are adjusted for inflation so our domestic purchasing power doesn't really change.

[TheScotsman]

[quote name='Dr. B' date='15 December 2009 - 03:00 AM' timestamp='1260867610' post='439163']
The funny thing about interest payments on national debt is that they are dollar denominated - explicitly nominal. If our dollar devalues our exports become more available, our debt burden is alleviated (reverse Fisher effect) and our capacity to acquire imports diminishes. All good things as far as the nation is concerned. Though the import situation is tricky, I for one believe we have high enough propensity for domestic forward industrial linkages and that we have never become dependent on important substitution industrialization practices. What we can expect to see compounding the interest rate is a flood of dollars to nations we are indebted to that have fractional reserve requirements (china), effectively giving them a big middle finger in the short run before the shortage of dollars (if we give them US dollars while they have to keep some percentage in reserve) will constrict markets in the variable scheme of things, so that when China reacts by a) lowering reserve requirements the interest rate/exchange rate floats down to a long-run equilibrium level or b ) when they increase their reserve rate to account for the depreciation of the dollar, our ability to purchase imports rises again and we're back to square one with our high dollar value.

China is not foolish, they are playing the game with textbook economics - but we are not foolish either, and we the citizens must understand what matters of international financial economics are either out of our hands or actually matter. Charley had the right idea with what I was saying earlier, but I'll sum it up again. In the long run, all wages are adjusted for inflation so our domestic purchasing power doesn't really change.
[/quote]

That was exactly my point on China. It would not benefit them in the least, to see the dollar fall. For that matter, quite the opposite is true.


In the long run, China has to be thinking of the past US trade imbalances, with Japan, then along came Korea, making the same products cheaper, the USA favoured Korean products, and Japan's economy suffered, Repeat with Korea when China came on scene. I can only believe China is looking at India (and Pakistan, if they ever get their heads out of their asses) while thinking they could be the next in line to repeat history. Another factor to consider is China's rapid shift from an agrarian, to an industrial economy. Without exports, they have a problem that would make our inflation look like a good problem.

[KyleTheJustin]

[quote name='Dr. B' date='14 December 2009 - 09:37 AM' timestamp='1260808625' post='438875']
please tell me you aren't serious.

I get my economics information from The Economist, Textbooks, CNBC, The WSJ, and several other media - none of which include shock propoganda youtube videos.. On account of this and my academic credentials I feel I am qualified to tell you that this video is bullshit. The Federal Reserves actions in coordination with the Treasury dept's hold no candle to the factors potentially affecting the value of the US dollar. Additionally, if you're at all familiar with the quantity theory of money (Milton Friedman anyone?) you'll know that INFLATION IS STRICTLY NOMINAL - ESPECIALLY WHEN HYPE PROPOGANDA LIKE THE VIDEO YOU POSTED RAISES PEOPLE'S EXPECTATIONS OF INFLATION, EFFECTIVELY DECREASING THE CAPACITY FOR TURMOIL IN THE SHORT RUN, THE ONLY PERIOD DURING WHICH WE ARE POTENTIALLY AFFECTED.

We are not Zimbabwe, we are not Argentina, we are the world's economic superpower! There's a reason countless nations peg their currency to our dollar! We don't have a fixed exchange rate, we don't monetarize our debt, and we will not suddenly find our farmland, industrial sectors, service sectors, and technology worthless because of the value of our dollar. Trade balance? yes - potentially. Real facets of GDP? No.

Within the first 2 minutes that video was talking about going to war because of this. Please... just... stop. Just stop now.
[/quote]

Whoa, simmer down there, Captain America. You talk about people coming across as condescending while you literally shit on other nations because you're American. Go back to your freshman economics class and click the Caps Lock button off on your way out the door.

To think that I wondered why people from other nations identified Americans as assholes....

[Dr. B]

kyle: It's not a matter of opinion to determine that the propensity for inflation in America in contrast to the nations I mentioned (Zimbabwe and Argentina) is minimal because the environments in which the multitude of variables are interacting is a lot more robust domestically. It's not about being an asshole, it's about being observant. We don't have a history of constantly monetarizing our debt, we don't have a history of defaulting on our debt, and we don't have a definite fixed exchange rate regime in place to protect the supposed value of our currency. Not to say that these things have never happened in America, but their occurrence is far from habitual - not the case in Argentina and Zimbabwe. Given that these countries actually have experience periods of hyperinflation and the US has not, I don't see how I'm "[shitting] on other nations because [I'm] American". Now I'm just being redundant.
Freshman econ class? If they taught this stuff in freshman econ classes you might have been able to contribute something to the discussion. Edited December 15, 2009 by Dr. B

[Dr. B]

edit: Given that these countries actually have experience periods of hyperinflation and the US has not since industrialization*

[KyleTheJustin]

Settle down, Glen Beck. I was an English major in college, so your economic vocabulary is impressive, but still hardly deters the point from the previous post. Well said on the other countires--at least you picked up the ball in that department. However, based on your way of speaking to others and your general top-down tone, I geniunely stand by my point regarding other nations.

Nice try on the insults, though. It really did make me smile.

[Dr. B]

I have a very low tolerance for fear-mongering, especially in matters of finance and economics. There's nothing wrong with being well-exposed, informed, or just having a wide canon of analytical capabilities, but understand how many people want to stop skin-deep in matters of economics. At the risk of trivializing what my education is worth, I feel like I have to let people know not to make unfounded claims because ninety-nine out of one-hundred times the rabbit hole goes a lot deeper, so to speak, than the dilettante would like to imagine.

Moving on: While we're talking about China on account of their potential to 'fuck up our program" (as the youngsters put it), we could do well to discuss why China is such a peculiar case and threat. I imagine it is because of how they do not and never will fit the typical model of a developing nation. They are pursuing an export-driven growth policy which is typical of most developing economies, but they, I feel, are not dependent on any developed economy. This is the scary part. Typically in developmental economics we see a trend of dependency in the forms of first: importing the mechanisms for industrialization to develop forward linkages from agriculture; and second: borrowing money to ameliorate the domestic market shocks when the state takes the initiative to abandon agricultural and commodity exports (raw materials) and instead begins exporting value-added goods. China has a wealth of exports (both raw materials and value-added goods) and is consequently not sensitive to demand shocks for single items and has a respectable hedge against the disproportionate increases in demand for raw materials accompanying increases in wealth (Engel's law). Further, an unethical and authoritarian state has declared efficiency as the top priority, regardless of the well-being of the citizens. China has coordinated its development so meticulously that it has become a benefactor, not a beneficiary, in the world market for loanable funds. China will never encounter the debt burden which retards the growth of so many other economies: The primary force subverting developing nations of the world. Assuming they have made steps to develop proper infrastructure, there is nothing holding them back. Should international demand for their exports fall, they have a huge population of auxiliary consumers. Should recipient nations default on their debt, they have huge reserves of every nation's currency.

We're in the need for nothing short of a revolution in China to abate our fears. We need the capitalists to arm themselves so that they becomes free to make the inefficient decisions that could potentially retard China's growth. Otherwise, get ready.

P.S. Kyle: I think you meant "...you *figuratively* shit on other nations because you're American."
That's just for laughs, no hate. Edited December 15, 2009 by Dr. B

[KyleTheJustin]

Nope, I stand by literally;) I appreciate your input and see a lot of valid points within your argument. However, I don't like to place the United States as the "super power" of the world when we, well, just aren't. The super power mentality died with World War II, case and point.

That being said, I have an appreciation for anyone who can actively discuss a topic they are well versed in. Props on that.

[Click]

[quote name='KyleTheJustin' date='15 December 2009 - 01:55 PM' timestamp='1260914135' post='439356']
 The super power mentality died with World War II, case and point.

[/quote]
Uhh what?  According to whose mentality?  Surely not the U.S. or the USSR.  

[f22a4bandit]

How can you say the term "super power" is dead? It hardly died with the end of WWII. In fact, the post-war period was a perfect example of the two super powers at the time competing with each other both in political theory and technological strength. Obviously the U.S.S.R. failed, but that just transformed the U.S. into the "lone" super power for the next 15 years.

If you don't consider the U.S., Russia and China to be super powers today, what do you classify as a super power?

*Edit* I use the term "post-war" very lightly. There were multiple wars by proxy between the U.S. and the U.S.S.R. during the Cold War (Korean War, Vietnam War, Afghanistan (1980s)). Edited December 16, 2009 by f22a4bandit

[Tyler]

Um, not only do you guys fail at economics, but apparently at history as well. After WWII, when England was the world's super power, they collapsed and after 3 failed attempts to bail them out, they passed the power to the United States who has been the world power since then up until the last few years when China, India, and other such countries started to rise, yet, not to the level of the United States. The United States still boasts the world's largest and expanisve army. You only hear about the failure, and only a handful of them, verses the plethora of victories the United States has achieved which fogs your mind. Foreigners know about as much about the United States on average as people in the United States know about other countries, on average. Maybe you should do a bit of research on a topic before you speak about it.

[KyleTheJustin]

Yeah, let's base our countries success off of militaristic might--that's brilliant. Furthermore, the reason our nation can classify itself as a super power ultimately stems from the capitalist system which exploits various nations for their goods and services at a price that disables them from doing any better. So yes, if you want to consider yourself a super power next to nations that virtually create everything we use, go right ahead. I, on the other hand, consider that global bullying, and refuse to take part in considering a nation that prides itself off of the exploitation of third world nations anywhere close to a super power. This also applies to your military, which you so highly like to place right atop your list of morally sound reasons why the US is a "super power." Once again, history included, the term super power died after WWII. Case and point.