Is it ever a good idea to print money?

[Wilmot_of_Rochester]

Well, you whined about my using only five years so I added some more years.

Uh huh… And if you look at the mean it looks a lot better with those giant rises in the 80’s and 90’s. Things get off track due to poor policy and financial movements in the 2000’s, but that’s one extreme instance that will happens very few times. By the way, using one institution isn’t a very good model to show an entire markets movement. Maybe you didn’t learn confirmation bias.

So, you are seeing the price of the shares of a leading bank in the last 30 years.

Uh huh. One leading bank? So, GM goes under and we should all panic because a company loses out to creative destruction. Nice model.

And you are seeing the price of gold which can be used as a proxy of sorts for the value of the dollar.

Nice red herring to throw in there - if I was arguing about gold prices, which I’m not. Seriously, do they just can these responses for you guys to use? It’s so predictable.

I can summarize the entire position of this place in two phrases.

Gold good. Fed bad.

Well congrats, Mr. Rubble.

You can draw some conclusions or just keep on parroting pseudo economics…

Pseudo-economics is a guy on a forum responding to a bunch of red herrings and strawmen. Oh. Ok…

No, you don’t understand what a free market is. You can’t own IP so trademarks are irrelevant. Both your bank and the people who you call counterfeiters produce the same good - unbacked notes. Yet you want to use violence to suppress competition. That’s called monopoly.

I don’t call that IP, but if you want to, fine. Leave out the part that is about not being the same thing - trademarked notes - but ok.

And yes, trademarks do, in fact, exist in the free market. They’re called brands and that’s not about intellectual property so much as it is about marketing and brand management. You can issue something that looks like a Rochester note, go ahead. But don’t call it a Rochester note; or at least not without expecting consequences.

As far as finance goes, yes. You’re the typical right winger who defends the status quo.

I don’t like central banks or the federal reserve, I’m not a fan of supply side economics, I don’t go in for the hype about the stock markets, and I’m a neocon right-winger - because the two are apparently synonymous now - for finance.

Tell me, do the neocons even have a position on finances?

[Juan]

And if you look at the mean it looks a lot better with those giant rises in the 80’s and 90’s.

Yes, you can average a whole dataset into one meaningless value. Just what a retard would do.

Gold good. Fed bad.

That’s part of the point, yes. A point wholly beyond your comprehension sadly.

But go ahead, just keep on making up the Mises-Hayek-Rochester theory of high finance…

[Wilmot_of_Rochester]

@Juan

Yes, you can average a whole dataset into one meaningless value. Just what a retard would do.

The people who lost and made tons of money on this company didn’t think it was so meaningless. And in any case, if you want to talk stocks - they’re not a great measure for the economy - loo at the DJIA in the past 100 years. By your measurements of one bank, how does the current path compare?

Again, however, quit misconstruing that I’m advocating the current system; I’m not - it has problems, but many fewer than a strait-jacket policy of 100% gold would.

@Juan

That’s part of the point, yes. A point wholly beyond your comprehension sadly.

No, I just try to be a little more genuine than repeating the same tired BAAAA! of all the other sheep.

@Juan

But go ahead, just keep on making up the Mises-Hayek-Rochester theory of high finance…

Let me guess, in your class for economics all of your references came from the Mises Institute?

[Esuric]

@Wilmot of Rochester

Let me guess, in your class for economics all of your references came from the Mises Institute?

Keep going bro, everyone’s about to give up! Just 17 more pages to go until you finally discredit Austrian economics.

[Juan]

The people who lost and made tons of money on this company didn’t think it was so meaningless. And in any case, if you want to talk stocks - they’re not a great measure for the economy

Take a look at the banking stocks and you’ll see a similar pattern. My point is, if FRB is oh so great, how come the firms that engage in FRB are almost bankrupt and have been bailed out by the thughs ?

Of course, of course, it is the free market at work. And of course, having a central bank since 1913, having fiat money, socialist insurance, etc, etc, doesn’t mean a thing. FRB is just so amazing. All those props are there to upset gold bugs. Not to prop up a bankrupt system.

Let me guess, in your class for economics all of your references came from the Mises Institute?

Yeah, I guess Bastiat, Leggett and people from the currency school were all members of the Mises institute. Actually any advocate of sound money is part of the Mises conspiracy. Well, of the late Mises conspiracy.

Still I wonder - how would somebody like Mises make such crude mistakes about fiduciary media … ?

[liberty_student]

@Wilmot of Rochester

But we’re talking about one industry of an economy for one century… 20 times five is 100.

The economy has changed in size, direction and capacity greatly in that time. What meaningful comparison can 1915, 1925 or 1935 have with today? You’re skewing the data away from the present crisis, to times when the US was on gold, or had a link to gold until 1971, and thereafter was able to print at will, and engage in capital consumption (sunshine capitalism) for nearly 20 years without consequence.

@Wilmot of Rochester

Are you saying means aren’t important?

I am a fan of Nassim Taleb. I believe that the world we face presents epistemological problems that cannot be solved with statistics. Econometrics and statistical historicism has little interest to me.

[banned]

@Juan

No it is not subjective. If I sell you a “'working car” with no wheels or no motor, I’m a fraudster. If I give you credit which is not backed by savings I’m a fraudster.

There is no explicit display of misleading your customer by issuing them unbacked money or selling them a car with no wheels. If a customer wants transparency, they will have to find a firm willing to disclose with them the exact details about the product they’re investing in or purchasing. Since transparency is in common demand, this will most likely not be very dificult.

@Juan

Let’s not start the everything-is-subjective game please ?

Do you disagree that “perfectly good” and “working car” are subjective phrases?

@Juan

Reducing the problem to “giving out slips of paper” reduces the discussion to meaninglessness.

But that is precisely what issuing unbacked credit is.

@Juan

The point is that the only way to get people to invest in a such a thing is by lying about the nature of the thing. Or by using violence like bankers do today.

No. That’s the only way someone could get you to invest in such a thing. People with keynesian or monetarist tendencies would most likely prefer unbacked money, as they would believe it to be the most efficient.

[Spideynw]

@banned

No. That’s the only way someone could get you to invest in such a thing. People with keynesian or monetarist tendencies would most likely prefer unbacked money, as they would believe it to be the most efficient.

No they would not prefer it, unless they like to be broke, and I don’t know anyone that wants to be poor (not that there are not a few in the world).

So again, it is pointless to discuss something in the free market that the market would never choose willingly.

[banned]

@Spideynw

So again, it is pointless to discuss something in the free market that the market would never choose willingly.

Presumably, they forsee that It is beneficial to hold unbacked credit, as that is the prevailing opinion of those schools. Not everyone’s an Austrian.

[Spideynw]

@banned

Presumably, they forsee that It is beneficial to hold unbacked credit, as that is the prevailing opinion of those schools. Not everyone’s an Austrian.

People do not need to understand Austrian economics to choose a good product or reject a bad product.

No one has ever chosen to use paper as currency (unless it is fiat) so there is no reason to believe anyone ever would in a free market, especially given the understanding we have of economics. It degrades quickly and is easily reproduced. The exact opposite of qualities we know people would desire in currency.

[banned]

Naturally, I believe that people would likely choose sound money. However, that does not entail that unbacked money ought to be prohibited, and that banks that issue such money ought to be prosecuted for fraud. If some people prefer unbacked credit, that option should be permitted.

[Wilmot_of_Rochester]

@liberty student

The economy has changed in size, direction and capacity greatly in that time. What meaningful comparison can 1915, 1925 or 1935 have with today? You’re skewing the data away from the present crisis, to times when the US was on gold, or had a link to gold until 1971, and thereafter was able to print at will, and engage in capital consumption (sunshine capitalism) for nearly 20 years without consequence.

Which is a fair criticism. I think it is important to look at the past, however, even if it’s relatively mid-term or even if you have to keep in mind those contextual facts.

@liberty student

I am a fan of Nassim Taleb. I believe that the world we face presents epistemological problems that cannot be solved with statistics. Econometrics and statistical historicism has little interest to me.

I suppose I just come from it different then. I think statistics and econometrics can help greatly, though I do agree that without economic theory to back it up it can be rather meaningless.

[Wilmot_of_Rochester]

@Spideynw

@banned

No. That’s the only way someone could get you to invest in such a thing. People with keynesian or monetarist tendencies would most likely prefer unbacked money, as they would believe it to be the most efficient.

No they would not prefer it, unless they like to be broke, and I don’t know anyone that wants to be poor (not that there are not a few in the world).

So again, it is pointless to discuss something in the free market that the market would never choose willingly.

This is a fine criticism - if it even is one - of the position in favor of fractional reserves. My point with you is, however, that it seems that fractional reserve banks, when used prudently, have been very successful at stemming off the inadequacies some of us see in the system.

For some reason, not all banks that use fractional reserves even without deposit insurance go under, so I think it’s a false impression to have when saying that fractional reserve banking is just inferior to gold backed currencies and would be done away with automatically in a free market.

I guess my only gripe with the entire subject comes from my belief that you do not have to be a gold-bug to be appreciative of Mises, Hayek, and the other great economists associated with them.

[Esuric]

@Wilmot of Rochester

I guess my only gripe with the entire subject comes from my belief that you do not have to be a gold-bug to be appreciative of Mises, Hayek, and the other great economists associated with them.

Indeed you do.

[Esuric]

@Wilmot of Rochester

Uh huh. One leading bank? So, GM goes under and we should all panic because a company loses out to creative destruction. Nice model.

This is only partially the reason why GM went under; ABCT will fill in the blanks, if you ever get around to reading it.

[banned]

@Esuric

Indeed you do.

Economics is wertfrei.

[scineram]

@Spideynw

No one has ever chosen to use paper as currency (unless it is fiat) so there is no reason to believe anyone ever would in a free market, especially given the understanding we have of economics.

So how is it that people chose fractional reserve banknotes repeatedly through history.

Rothbardians cannot allow facts tinker with high theory.

[nirgrahamUK]

I expect you are using a rather perculiar definition of ‘chose’

[hayekianxyz]

@Esuric

Just 17 more pages to go until you finally discredit Austrian economics.

I don’t think he’s attempting to discredit Austrian economics, as far as I’m aware he’s putting forward an analysis in terms of monetary equilibrium theory. Now, George Selgin has done a lot of work an monetary equilibrium theory, as have other Austrians such as Steve Horwitz, for you to say that he’s “discrediting” Austrian economics is disingenuous. Austrian economics neither began nor ended with Rothbard, who was very confused, to say the least, when it came to monetary theory.’

@nirgrahamUK

I expect you are using a rather perculiar definition of ‘chose’

Not really, at least, not as far as I know. Here’s the thing, if you’re so sure that FRB is an inefficient way of banking, then you should have no issue with letting it go head to head with 100% reserves in a free banking system. You’re arguing like a lawyer, either fractional reserves are fraudulent and will, as a result, beat 100% and therefore need to be outlawed, or it’s just an inefficient banking system that will lose out to the competition when it comes to it. You can’t have it both ways.

Now, if you wish to chose the former route of argument you’re going to have to deal with the fact that you’re defining terms in such a way that you’re conclusion follows. Historically deposits have been intepreted in the way Huerta de Soto points out and in the way Selgin and White define the term. At the end of the day what the term “deposit” means depends on local custom, you can’t rule out FRB a priori because at some point in history in a particular place, people decided to use “deposit” to mean an easement.

Alternatively, you can use the second route, in which people simply don’t want fractional reserves, they wish for all of their money to be in the vaults. But, that doesn’t square with history. Now with Hoppe’s, Block’s and Rothbard’s own arguments.

@Wilmot of Rochester

I don’t like central banks or the federal reserve, I’m not a fan of supply side economics, I don’t go in for the hype about the stock markets, and I’m a neocon right-winger - because the two are apparently synonymous now - for finance.

Of course, you’re a Keynesian pinko socialist commie who hates freedom. Of course, there was me thinking that monetary disequilibrium theory began with Clark Warbuton and was further expounded by later monetarists such as Leland Yeager, as well as Austrians such as Selgin and Horwitz.

Funny thing is, I’m pretty sure you’re a free banker. Who favours genuine competition in banking, as opposed to the supression of various forms of banking.

Back to my hiatus, I just couldn’t let all these fallacies go.

[nirgrahamUK]

@GilesStratton

Here’s the thing, if you’re so sure that FRB is an inefficient way of banking, then you should have no issue with letting it go head to head with 100% reserves in a free banking system. You’re arguing like a lawyer, either fractional reserves are fraudulent and will, as a result, beat 100% and therefore need to be outlawed, or it’s just an inefficient banking system that will lose out to the competition when it comes to it. You can’t have it both ways.

poor reasoning Giles.

Here’s the thing, if you’re so sure that Being A Thief is an inefficient way of Making A Living, then you should have no issue with letting it go head to head with Legitimate Commerce in a free market system. You’re arguing like a lawyer, either Stealing is theft and will, as a result, beat Legitimate Commerce and therefore need to be outlawed, or it’s just an inefficient way to Make A Living that will lose out to the competition when it comes to it. You can’t have it both ways.