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Thread: Four Horseman - Opinions

  1. #21

    Default Re: Four Horseman - Opinions

    Here are several examples why the silver/gold/platinum/diamonds/shells standard won't solve much:

    1) Any credit is a bet on the future. Say I am a bank and I only lend the gold coins I have in my vault. Somebody comes and asks for a loan of 10 gold coins. I need to trust that in the future that person can indeed pay me 10 gold coins + interest.

    Even if I secure those 10 gold coins with a collateral I am betting the collateral will be worth 10 gold coins in the future.

    Since I am not the only bank around, I can't ask an outrageously valuable object/piece of real estate as a collateral for 10 gold coins, because the borrower would go to another bank with lower demands. Which means that no matter what collateral I might get, it won't be much more valuable than 10 gold coins today. As such I am back to square 1, betting it would be still worth 10 gold coins in the future.

    If my bet turns out to be incorrect, I have lost some of those 10 gold coins (or all of them) entrusted to me by the people who made deposits to my bank.

    The gold standard can't prevent banks from going belly up. And during all that time currency was backed by gold, some banks went under.

    2) People would make speculative bets with something else, not necessarily with currency. Look up the 16th century tulip bulb market crash or the 19th century stock market, bond market or real estate market crashes. Spain and several South American countries were invaded because they failed to pay their debts. In the 19th century the Ottoman Empire had to give the tax collection to a consortium of international banks, after defaulting on its sovereign debt, etc. During all that time currencies were backed by gold;

    3) Gold, silver, platinum, shells are in finite quantity, human ingenuity is infinite.. Say the total quantity of precious metals is already allocated to various businesses when two young men, Steve Jobs and Bill Gates, come to ask for funding for their startups (Apple and Microsoft respectively). They can't get any funding because there's no precious metal left unused. The world would know no Apple and no Microsoft. Nor Ford, nor Boeing, and quite likely no Internet either.
    IN PATROCINIVM SVB MareNostrum

  2. #22
    hellheaven1987's Avatar Comes Domesticorum
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    Default Re: Four Horseman - Opinions

    Finite or infinite, the basic rule of Gold Standard is not much different than current monetary policy, hence I don't see how reverse back to whatever metal standard would really change anything in big direction.
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  3. #23
    dogukan's Avatar Praeses
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    Default Re: Four Horseman - Opinions

    Quote Originally Posted by Caelifer_1991 View Post
    They are fully aware of all of these, which is why they are, as I said, dishonest. As for the effects of food aid, and they touched repeatedly upon the seeming injustice of obesity and starvation existing in parallel, stressing global food distribution instead of production, the effects are really quite simple in pure supply and demand terms. I have looked into it, and the diminishing food prices that result have a dire effect upon profit margins of farmers in the developing world, forcing them instead to farm cash crops. When combined with tariffs and subsidies that protect our agriculture, thus reducing the access of foreign farmers to foreign markets, and with their domestic markets undermined, food production there decreases, thus increasing the probability and severity of famine occurring. Food aid is simply part and parcel with tariffs and subsidies, they are there to expand our own productivity, expand our access to markets, and give our producers a competitive advantage there. In a Machiavellian sense, there is nothing wrong with undermining the production of developing countries to enhance our own production, if it causes death and famine then that is their problem, my point is that such a strategy is being sold as "aid" and "charity", and that the people arguing for more of it are, as I've said, dishonest and fundamentally self-serving.
    I see what you mean. But are you against whole concept of aid, or just food aid. THe way I see it, food aid indeed undermines local development in favor of turning to place into producer of cash crops for the global capitalist system. That really depends on the geography and socio-political situation of the area involved of course. There are a lot of debates over agricultre between cash-crops and basic needs production.
    I see aid, overall, as a necessity. The form of aid can be different than food aid though. Thats why I was talking about pre-neoliberal period where there were mass projects in coop with the state. After the crisis, aid also became "privatized" and became a tool of NGOs who cooperate with local FDI. So a lot of the aid started to go to western companies or corrupt high-ups in these countries.


    As for Keynesian economics working in some cases and not necessarily working in others, well, what's your point?
    That economy is not a black&white science due to extreme amount of variables. Expected results are rarely gotten, or at least there is always heavy debates over the result of an action. Thus, it is clear to me that each economic move is a political move that takes its force from a certain minded group rather than having "scientific" motivations.
    Success and failure depends on the opportunities present, on external realities as well as internal strategies. I know this already. This doesn't invalidate the merit of discussing the effects of specific economic policies, and it doesn't mean that their effects are not observable. As for debt in gold standard times, I wouldn't know where to start: do you want to discuss inflation, (the demise of) fractional reserve banking, profit, the history of debt prior to FIAT currency, what are you asking? Debt can exist on a gold standard just as it can exist on a FIAT currency, by tethering the value of the dollar to gold they wish to end the depreciation of the currency, which would otherwise, and is otherwise eating away at the value of the debt obligations of the US government, mortgage borrowers, and so on. Since they are presumably in receipt of a large proportion of these debt obligations it makes sense that they would wish to maximise their return, it is the rich that would benefit, not the poor or the middle class.
    I know debt existed under gold-standard. I don't really care about the way capitalism works because overall I do not see it sustainable. I was referring to debt-led growth that became a phenomena after Nixon(?). Debt-led growth is a lot more upper-class friendly way of growth, hence the relative decline of worker's situation since 80s even in the west.

    Again, they are being clearly dishonest when they imply that what they are arguing for is to the benefit of the majority of the population, they are arguing for measures that would expand the wealth of the already wealthy, including themselves, nothing more, nothing less.
    I don't know, P.Krugman, Joseph Stiglitz and all those others dont really have much to gain from those policies individually. These people have been writing over these for so long. Are you sure you watched the last bit of the documentary where they list their desires? How does upper-class tazxing increase wealth of the wealthy? These guys are the ultimate middle-class friendly types.


    Quote Originally Posted by Thorn777 View Post
    The thing is with Keynesians, or original Social Democrats, or guys like me, is that we think these "cycles" should be held as inherent truth.

    Hence the political class should counter-act. It did in the post WW2 settlement, and not just by "modyfing" a bit, but by "modyfing" in a quite revolutionary way based on this inherent truth. Problems started when a coup d'etat in slow-motion started settling in(in my mind with the creation and shaping of the CIA trough Wallstreet) where slowly decade after decade the strong keynesian era position was reduced to whats still left today and will be gone completely in the years to come.

    I think this inherent truth should be the basis of any constitution.

    I think that individuals should be able to develop as individuals, not only as an humanist but also from a materialistic-welfare and economic pov, which is why I srsly cant even contemplate communism. The life-time of a cycle can be extended to near infinity, or counter-acted in a sensible way, but only when held as an inherent truth within a global consensus.

    The problem is not Keynesian theory, but the intentions of the powers that be and the ignorance and docility of the masses in a democratic setting.
    I am not referring to "inevitable cycles" but rather to inherent tendencies. Those have not change the way I see it, or its forces switched to somewhere else in the world.

    Destruction of Keynesianism was indeed political. Like I said to the other guy, the way I see it, all economic decision are political and have their roots in a rising force in the system. Economics try to act as a science above politics, but the massive debates over economic stances are all actually rooted in socio-political relations. In Keynesian times, labor was powerful. Post-Keynesian times, labor power was smashed.
    This is purely political, there is nothing scientific here as crises were produced under both Keynesian models and neo-liberal models. Crises are an inherent "tendency", not necessarily an inevitability.

    Its not that relevant but communism is a different matter. 20th century communism as it existed(and its extreme varieties all over the world) and communism as an abstract state of nature are different things.
    Last edited by dogukan; August 29, 2014 at 04:39 AM.
    "Therefore I am not in favour of raising any dogmatic banner. On the contrary, we must try to help the dogmatists to clarify their propositions for themselves. Thus, communism, in particular, is a dogmatic abstraction; in which connection, however, I am not thinking of some imaginary and possible communism, but actually existing communism as taught by Cabet, Dézamy, Weitling, etc. This communism is itself only a special expression of the humanistic principle, an expression which is still infected by its antithesis – the private system. Hence the abolition of private property and communism are by no means identical, and it is not accidental but inevitable that communism has seen other socialist doctrines – such as those of Fourier, Proudhon, etc. – arising to confront it because it is itself only a special, one-sided realisation of the socialist principle."
    Marx to A.Ruge

  4. #24
    Caelifer_1991's Avatar Vicarius
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    Default Re: Four Horseman - Opinions

    Quote Originally Posted by dogukan View Post
    I see what you mean. But are you against whole concept of aid, or just food aid. THe way I see it, food aid indeed undermines local development in favor of turning to place into producer of cash crops for the global capitalist system. That really depends on the geography and socio-political situation of the area involved of course. There are a lot of debates over agricultre between cash-crops and basic needs production.
    I see aid, overall, as a necessity. The form of aid can be different than food aid though. Thats why I was talking about pre-neoliberal period where there were mass projects in coop with the state. After the crisis, aid also became "privatized" and became a tool of NGOs who cooperate with local FDI. So a lot of the aid started to go to western companies or corrupt high-ups in these countries.




    That economy is not a black&white science due to extreme amount of variables. Expected results are rarely gotten, or at least there is always heavy debates over the result of an action. Thus, it is clear to me that each economic move is a political move that takes its force from a certain minded group rather than having "scientific" motivations.


    I know debt existed under gold-standard. I don't really care about the way capitalism works because overall I do not see it sustainable. I was referring to debt-led growth that became a phenomena after Nixon(?). Debt-led growth is a lot more upper-class friendly way of growth, hence the relative decline of worker's situation since 80s even in the west.



    I don't know, P.Krugman, Joseph Stiglitz and all those others dont really have much to gain from those policies individually. These people have been writing over these for so long. Are you sure you watched the last bit of the documentary where they list their desires? How does upper-class tazxing increase wealth of the wealthy? These guys are the ultimate middle-class friendly types.
    The only aid that achieves long term, sustainable improvements in the quality of life are those that increase production. As far as I can tell this can be sub-divided into essentially two categories, training/ information distribution and development of infrastructure. The type of infrastructure projects carried into within the EU for instance, could be considered to be aid from the richer countries of the Union to the poorer ones. Of all the aid currently given the third world, I consider that its only the rare exception that actually achieves anything to the benefit of the people there over and above all other concerns. That aid which involves a direct transfer of goods is inherently undermining to domestic markets, a similar scenario can also be seen with clothing for instance, wherein supply of second-hand clothing from the West for free dramatically undermined Africa's textile industry; when combined with the removal of many of the skilled personnel required to manage such industry at the deconstruction of the empire and the corresponding increase in costs, as well as degradation of infrastructure, political instability, and so on, this led to the wholesale deconstruction of Africa's industry at the fall of Empire. You see similar stories in literally every other case that involves goods-based aid.

    As for debt, it's true that the supply of debt has increased and that the market has moved to make use of it. The inflation that results from the increase of debt however directly undermines the value of it, and the increase in supply reduces the interest rates associated with that debt to match the risk associated with the borrower. The net result of this has been an opening up of the credit market, allowing for efficient and expedient growth in small businesses that would otherwise have found themselves unable to access such credit at all. Without it, we would find ourselves looking back to the days when just about the only opportunity to expand a business faster than net profit would allow, was to go hand-in-cap to some rich investor that might be willing to help you out at the expense of buying half your company, it would become much more discretionary, much more personal, and involve much less opportunity for small businesses to achieve growth.

    As for taxing the passive increase in wealth, well that depends on what wealth they plan on taxing and on whether they also plan on destroying tax loopholes at the same times. Bare in mind that property for instance is also one of the primary ways in which the middle class accumulates wealth as well. They'd have to better explain precisely what they intend, as it is, their vagary makes me extremely suspicious.

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