$6100

[mmm....shiney!]

What will it take to find some common ground?

The only common ground we could possibly meet on is when everyone understands how a modern currency system operates. Most people including politicians, mainstream economists and the media don't or actually do in secret but are not willing to jeopardise their power base or careers to publicly acknowledge the facts. The electorate therefore is largely kept in the dark unless individuals seek out the facts themselves.

Once we all understand how a national government funds itself and the implications for that on fiscal policy (the common ground) then we can have our differences (which reflect our values) on where, when and how a government should spend in the best interest of the people.

The basics are*:

1. a government can spend it's own money without facing financial constraint
2. it doesn't rely on taxes or debt to fund the spending
3. a government can always meet its obligations
4. inflation is the main constraint, not tax revenue or debt

* for a sovereign nation that issues its own free-floating currency

 

[Teh silvers]

Why is that?

Printing infinite money makes the dollar worthless against finite gold, repeating history's lesson that paper currencies always collapse

 

[mmm....shiney!]

Printing infinite money makes the dollar worthless against finite gold,

Gold, like most assets, goods and commodities rises in price over time. That doesn't imply that these price rises precipitate an impending collapse of the monetary system.

repeating history's lesson that paper currencies always collapse

Which paper currencies?

 

[betterinvestmentthanshare]

The basics are*:

1. a government can spend it's own money without facing financial constraint
2. it doesn't rely on taxes or debt to fund the spending
3. a government can always meet its obligations
4. inflation is the main constraint, not tax revenue or debt

* for a sovereign nation that issues its own free-floating currency

1. via government bonds?
2. Taxes collected are is deleted to balance the book? What goes out must come in.
3. More government bonds at the expense of the taxpayer
4.same as 3

 

[betterinvestmentthanshare]

Gold, like most assets, goods and commodities rises in price over time. That doesn't imply that these price rises precipitate an impending collapse of the monetary system

It can Shiney, until something (policy) is implemented to change the course or at least try, the genius act is a example of this

 

[mmm....shiney!]

I feel common ground is getting harder to find.

1. via government bonds?
2. Taxes collected are is deleted to balance the book? What goes out must come in.
3. More government bonds at the expense of the taxpayer
4.same as 3

1. Government's do not issue bonds to raise funds. When a government sells bonds no new money is created, all that happens is one form if money (securities) is exchanged for another (reserves).
2. Taxes do not fund spending. (See: https://www.silverstackers.com/foru...overview-of-what-happens-to-our-taxes.110851/)
3. See 1. The RBA just creates extra reserves.

4. As your 3 incorrect, logically so must your point 4.

It can Shiney, until something (policy) is implemented to change the course or at least try, the genius act is a example of this

The Genius Act will not precipitate the demise of the USD.

 

[Croesus]

If taxes do not fund government spending, then I can stop paying my tax bills, right?

 

[Jislizard]

Gold, like most assets, goods and commodities rises in price over time. That doesn't imply that these price rises precipitate an impending collapse of the monetary system.



Which paper currencies?

OK, I'll bite

The Zimbabwe Dollar is a good example of a paper currency that collapsed. It hyper-inflated, lost its buying power and was replaced by the USA dollar and now a "gold backed" currency.

Venezuela has had several fiat currencies over the past few years, all replaced by a new one with fewer zeros. Many South American countries have had currencies that have failed or undergone hyperinflation, Argentina has had a few since the 1980s, Brazil has had its fair share. For the most part the country just brings out a newer version and converts your old fiat into the new fiat.

Most of the countries that were formed after the break up of the USSR underwent hyperinflation in the early 90s. Not a complete failure but certainly not working in the way they should as a store of wealth.

And of course all the European currencies that were replaced by the euro, not exactly failed but many of those countries no longer redeem their old currency into the new euros so they are worthless pieces of paper. List of countries in EEC which no longer accept their old fiat: https://european-union.europa.eu/institutions-law-budget/euro/exchanging-national-currency_en

Here is a list of 152 failed currencies https://www.reddit.com/r/Bitcoin/comments/8nwpo9/i_made_an_infographic_there_are_152_fiat/ you can join in arguing about which ones don't count in the comment section.

 

[dollars]

@Croesus. “ If taxes do not fund government spending, then I can stop paying my tax bills, right”.

Unfortunately “tax” is one part of the integral control features!

Edit to add. I have only just recently realised, thanks to Shiney, that the “economics ” I had studied at school in the ‘70’s has now been overtaken by the modern monetary theory.

 

[mmm....shiney!]

OK, I'll bite

And you know what precipitated hyperinflation and the eventual collapse of their monetary systems? The collapse of their political/social/financial/ agricultural and or manufacturing systems.

 

[Teh silvers]

Gold, like most assets, goods and commodities rises in price over time. That doesn't imply that these price rises precipitate an impending collapse of the monetary system.



Which paper currencies?

I'll just name a few.

The Venezuelan Bolívar
The Zimbabwean Dollar
The Yugoslav Dinar
The Hungarian Pengő
The German Papiermark
The Continental Currency
The French Assignats

 

[Jislizard]

Gold, like most assets, goods and commodities rises in price over time. That doesn't imply that these price rises precipitate an impending collapse of the monetary system.



Which paper currencies?

 

[Croesus]

Which comes first—a government which cannot pay its bills, or the collapse of trust in a government which cannot pay its bills?

 

[betterinvestmentthanshare]

Shiney, why don’t you start a new section “Modern Monetary Theory”
A dedicated section to teach us less educated.
Surely common ground will be found.

 

[JohnnyBravo300]

He's just making stuff up for sake of debate.
There's nothing new under the sun, doesnt matter what you call it.

It works until it doesnt and we are living through the failure now, just look at PMs.

There's nothing to understand in MMT. Its modern Marxist garbage and not worth burning your brain cells over.

Economic and monetary systems arent just reinvented out of thin air. There is already historical precedent and math already exists.

 

[mmm....shiney!]

There's nothing to understand in MMT. Its modern Marxist garbage and not worth burning your brain cells over.

I'd suggest you revisit your thesis. Marxism is a theory that explores the historical power struggle between the proletariat and the bourgeoisie and how the ownership of the means of production reinforces that power struggle to favour one group over the other.

MMT on the other hand is a framework for understanding how a modern sovereign nation that issues it's own free floating currency funds its spending. Based on your track record I don't expect you'll take any of that on board.

Economic and monetary systems arent just reinvented out of thin air.

Of course they are. They're theories of human behaviour. As utility and our human created systems evolve over time so to does the way we think about and analyse them. Newsflash @johnnybravo! Precious metals aren't money any more mate! There were brief periods in the history of civilisation when some people used them as currency but we've moved on thankfully and so has our views of how economies operate (well most are stuck in the past on that).

 

[mmm....shiney!]

Shiney, why don’t you start a new section “Modern Monetary Theory”
A dedicated section to teach us less educated.
Surely common ground will be found.

If you feel the need to educate yourself then start a thread yourself.

 

[betterinvestmentthanshare]

If you feel the need to educate yourself then start a thread yourself.

Come on Shiney, you’ve proven yourself to be a champion on economics and finance, why not share your knowledge to help instead of belittling members

 

[mmm....shiney!]

Come on Shiney, you’ve proven yourself to be a champion on economics and finance, why not share your knowledge to help instead of belittling members

@JohnnyBravo300 doesn't need anyone to defend him, if he digs the hole he finds himself in then he can dig his own way out.

Like I said, if you feel the need to be educated then start a thread yourself. That's how I learn eg:

Having had a chat with a couple of others in this thread and I thought I'd better dig into why governments still issue bonds. I found this video by Richard J Murphy, basically bonds are an historical relic that are still issued to this day because the market has a demand for a secure savings/reserve assets.

https://www.silverstackers.com/foru...-when-they-don’t-need-to.111107/#post-1295898

I note you haven't added to or commented on that clip despite holding the belief that bonds fund government spending.

 

[Croesus]

MMT is not universally accepted. Plenty of economists reject it completely.