Comments on: The real winner: Inflation http://blogs.reuters.com/great-debate/2012/11/09/the-real-winner-inflation/ Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: maximillianwyse http://blogs.reuters.com/great-debate/2012/11/09/the-real-winner-inflation/#comment-66529 Mon, 12 Nov 2012 23:46:10 +0000 http://blogs.reuters.com/great-debate/?p=15479#comment-66529 Yes, oil is $85 a barrel, but if the reason were a dim view of the dollar, new US debt would not be yielding negative real interest, near zero nominal. The reason is simply supply and demand. For confirmation, note that US oil production has increased as the price increased. We now produce nearly as much oil as Saudi Arabia, and are likely to surpass them in a few years. If the culprit were inflation, rising prices would have little effect on production.

maximillianwyse.wordpress.com

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By: IrateScientist http://blogs.reuters.com/great-debate/2012/11/09/the-real-winner-inflation/#comment-66501 Mon, 12 Nov 2012 18:27:23 +0000 http://blogs.reuters.com/great-debate/?p=15479#comment-66501 The difficulty with the argument that anyone who wants gold is free to purchase it, is that when you buy $100 worth of gold, and the government inflates the dollar so that the gold is now worth $200, the government regards that change as a capital gain, which it taxes.

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By: reality-again http://blogs.reuters.com/great-debate/2012/11/09/the-real-winner-inflation/#comment-66358 Sat, 10 Nov 2012 15:44:39 +0000 http://blogs.reuters.com/great-debate/?p=15479#comment-66358 I used to think that diamonds were a girl’s best friends, but it seems they’re a bit out of fashion these days.
As for gold, it used to be useful in dentistry applications, but it’s been a while since it was replaced by better materials.
My point is that gold is just a rare metal, and not a particularly useful one, and its monetary value is just a function of what people are willing to pay for it, as a function of their interest in using this metal to store value.
That is to say that gold’s perceived value is no less fictional than the value of anything else that humans are willing to buy, sell, or keep, including tulip bulbs, artifacts created by people promoted or accepted as ‘artists’, old alcoholic beverages, paper notes printed by governments or corporations, relics of ancient civilizations, condos in Miami… well, you get the picture.
The price of gold is subject to fluctuations, manipulations, and to a certain extent even fashion and inflation, as are prices of other goods. Therefore, it’s not particularly useful as a standard.

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By: MoBioph http://blogs.reuters.com/great-debate/2012/11/09/the-real-winner-inflation/#comment-66356 Sat, 10 Nov 2012 15:31:33 +0000 http://blogs.reuters.com/great-debate/?p=15479#comment-66356 Anyone who prefers gold to US currency can convert the latter to the former. Et voila. You’re a member of the gold-standard club. Like Pat Boone. Or Donald Trump, the premier billionaire revolutionary of our age. Alternatively, you could maintain your wealth in the form of a diverse set of assets, which would probably include a little gold, along with a little of each of the other elements for which there are stable isotopes. Assuming the number of consumers (A.K.A. human beings) continues to rise, and assuming a constant per capita demand for each such element, the value of your collection of elements should increase, given the law of supply and demand. (This alone would explain such trends as the rising price of NYC real estate, gasoline and groceries that you bemoan. Though why anyone perturbed by this would hoard gold is a bit of a mystery. For the sake of breathing easier, you’d think they’d make like the astronauts and bank on a two-to-one ratio of hydrogen atoms and oxygen atoms to quench their thirst for security.)

Or look at it this way: The currency of a nation is backed by the economy of that nation. If you want to maintain the value of your currency while expanding the product of its supply and its rate of circulation, you will want to proportionately expand the value of your economy. Or vice versa, from the perspective of the Federal Reserve System. Expanding the economy of a nation often requires an expansion of its debt, especially during challenging times. As the economy of a nation has an indefinite lifespan, nations can carry large debt-to-GDP ratios indefinitely. Catastrophe, of with hyperinflation would merely be a symptom, would only ensue if the economy failed to grow in proportion to the number of currency units times their rate of circulation. Once in a while, catastrophe strikes, even with good planning. As long as such catastrophes don’t strike everywhere at the same time, they tend to be reasonably survivable these days. If catastrophes did strike everywhere at the same time, gold would probably be the furthest thing from most people’s minds.

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By: WilliamLaSalle http://blogs.reuters.com/great-debate/2012/11/09/the-real-winner-inflation/#comment-66355 Sat, 10 Nov 2012 14:39:51 +0000 http://blogs.reuters.com/great-debate/?p=15479#comment-66355 Since 1960, the natonal debt has gone up every year, look it up.

All the people of the United States have known since 1969 is inflation. A large part of the blame goes to Lobbyist, the AMA, Drug Companies, Oil Companies, and greed.

Greed like the greed that raised the price of plywood from about 5 dollars a sheet to like 25 dollars a sheet after a few hurricanes and Vice Presidents in business getting raises and bonuses. We do not have supply and demand any longer, just what the customer can be forced to pay.

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By: OneOfTheSheep http://blogs.reuters.com/great-debate/2012/11/09/the-real-winner-inflation/#comment-66339 Sat, 10 Nov 2012 07:13:12 +0000 http://blogs.reuters.com/great-debate/?p=15479#comment-66339 Anyone that doubts this excellent and honest commentary I would remind that the U.S. has NEVER retired the huge debt it ran up during WW II.

Why don’t we hear about that? Because successive legions of politicians have simply and steadily inflated that dollar amount to insignificance. It has simply ceased to “matter”.

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