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Originally Posted by brandonstills
Those in power want you to believe it is complicated. It is really quite simple. Take something that you bought. What did it cost 10 years ago? Is it more or less? More=inflation, less=inflation.
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Economics is not simple. First, it is not a hard science so it is not possible to conclude absolute truths in most instances. If you find that it is simple, it is probably a sign that you are reading the simpleton version of it.
Second, I assume you meant ?less=
deflation?. Mainstream economists and policy makers all agree that moderate inflation is the target. This is because ideal inflation (0%) is virtually impossible to achieve and the risk and consequences of deflation are purposely trying to be avoided.
The reason 1-2% inflation is the usual target is because it encourages investment and production, and results in a growing economic environment. If prices are falling (deflation) investors, producers and consumers are tempted to avoid investing, producing and consuming because they anticipate that prices will be even cheaper if they postpone.
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Politics is sensationalized but real economics is not. It is about the facts and deductive reasoning.
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I don't believe there is much room for long chains of deductive reasoning in economics.
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Don't pay any attention to the CPI. It's bullshit. Inflation is different for each person since each person spends their money on different things and different things change prices at different rates.
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Only conspiracy theorists think the CPI is bullshit. Just because individuals vary on where they spend their money, does not mean that the CPI is not a real reflection of prices contained within the CPI. Your statement is a non-sequitur.
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The reason for gold is so that currency actually has real value and so gov't and those in power can't cheat the economy and steal from the general public by inflating the currency.
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Incorrect. Gold backed money (commodity money) can lose value just like fiat money. The problem is compounded because it is less predictable and less stable, and not in control of the gov't. Example: A new gold mine opens up and the value of your commodity money plunges.
And there are more problems... Gold backed money has been tried before and it has been abandoned. That in and of itself should tell you something (and hopefully it?s not some CT conclusion that involves Jewish bankers and the illuminati). It was abandoned because commodity backed money constricted the money supply, causing deflation and preventing a recovery.
Furthermore, the US would need to fix the dollar to roughly $10,000/oz. so that there would be more than enough gold to support the current economy. There would be extreme economic dislocation, HOWEVER the main point to keep in mind is that you can only do it ONCE.
Any countries that went back on the gold standard would be at the mercy of speculators as well as external events and unable to keep their economies from crashing.
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By printing money everyone who has money has been robbed. Their money is now worth less than it was before. This has a greater affect on the poor and middle class because the rich now how to move their assets to inflation protected assets.
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The rich will always have an advantage over the middle class / poor, but everyone has the opportunity to choose assets that benefit in a normal economy.
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The amount of gold in circulation is irrelevant. It wouldn't have any effect. All prices of goods and labor would go up or down unilaterally based on the amount of gold. It is all relative. If you got paid half as much but everything is half the price has anything really changed?
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It is absolutely relevant as I explained above.
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Transactions don't have to be done in tangible gold, just so much that the currency is 1-to-1 with the amount of gold. You can use electronic transfers, checks, and credit cards just like we currently do.
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After the deflationary collapse, perhaps.
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Busts like the housing crisis are the result of fiat currency and fractional reserve systems. Gold would solve that problem. There are other issues too but that is the main thing.
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How do you explain past bubbles like Tulip mania, the South Sea Bubble, etc?
I don't think YouTube videos are an adequate source. Do you have any other material (books perhaps) that you think better argue for a return to the gold standard?
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I encourage you to look into the issues objectively. They are really quite simple and easy to understand. It is just that society has been brainwashed that makes it so confusing.
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It seems that society is being brainwashed to believe economics is a simple subject when it is not. It is hard to find highly educated economists who agree on everything, which should tell you something.