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Inflation: This Time It Really Is Different
Both political parties have managed to dodge the bullet. Government deficit spending, borrowing, and money creation by the Fed have gone relentlessly up with no repercussions in either inflation or interest rates. In fact, those skyrocketing deficits and money creation have been rewarded with little inflation and historically low-interest rates. Lefties have even concocted Modern Monetary Theory (MMT), a formalized economic theory that says that the US can create all the money it wants with impunity. Feel free to spend away!
But interest rates have recently increased (dragging down the stock market) and I’m afraid that’s just the beginning. This article from AIER makes a convincing argument that the chickens have finally come home to roost.
Published in General
Yes, that’s possible. But also corporations are purely profit driven. There is no profit in paying a person, say, $1,000 a month to buy $1,000 of food, rent and entertainment. In fact there are administration costs that would make it a net loss. Why would corporations submit to these costs? In other words, what good is a population of 8 or 9 billion if they don’t produce anything for the corporation and only have to be subsidized?
But if there aren’t people – maybe even 8 or 9 billion or more – why does anything need to be produced?
It’s an interesting conundrum. Mack Reynolds wrote many of his stories involving a similar situation. And in another situation I mentioned a sci-fi story I’d read where basically all manufacturing/production had been automated and the only thing people existed for was to use up/wear out the stuff that had been produced.
Maybe it’s all about power/control. If there are no people to oligarch, then the oligarchs are pointless too.
It’s been transferred from savers to borrowers. Why? Because the government is the biggest borrower of them all, and they’ve skewed the system in their favor.
Are we still sure of that today? Lots of corporations seem willing to turn their backs on 75 million potential customers based on political posture.
Exactly. It’s a stupid system they try to equalize with redistribution.
I’m pretty sure the basis of it is you can’t be militaristic on a deflationary standard. Then it gets complicated from there.
Government Is How We Steal From Each Other™
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Not only that, corporations like Amazon can buy a competitor ***WITH DEBT***and then their stock goes up. Also, management and the board ultimately only cares about buybacks that make options pay. This is all because of low interest rates and bad government policy. I tried to explain this to people and nobody gets it. There is a lawyer on one of the podcasts that hates my guts, she can’t stand that I’m right about this.
Yes, power of the useless proles, sure. That would make a fine hobby. But what if they only produced for the needs of the productive? And they cut out the other 95% of the population. Think of the benefit to the ecosystem, and all the vast green spaces returned to the pristine glory of nature. The Ganges would be drinkable again.
Right here I’ll mention 2 things. We, during my lifetime in America, have always had economic growth as a domestic policy objective. Does that still apply in this future under discussion. there are three endeavors involving actual human being that don’t disappear under the robotic production/human consumption scenario: arts, sports, and entertainment.
Don’t oligarchs also want to be admired/adored?
When the robots are smarter than any humans do the robots take care of all the technological innovation? What do the different species of robots do when they don’t agree on the next steps?
The whole economy, government, and financial system has to adjust to deflation, otherwise known as better living through purchasing power. If they do that, then yes.
I think 500 million would be plenty to be seen all bowing at once. But I’m not greedy. Will anyone get a kick out of being worshiped by 7 billion people they never see? I’m just asking — I don’t know.
Is the truest populist approach one that chooses the deflation approach? If we achieved that what would today’s elite look like. There must be loads of talent in that group that would do as well as now. What would society’s basic structure look like economically?
This is a good question. A slight deflation spreads power out to the people instead of sending it up to the top.
The problem is, it would retard credit growth a little bit which, if we had more community banks, would spread power and agency out to the people as well.
That podcast I posted talks about this, but be warned those guys are talking about really complicated stuff and I think it’s probably a dumb idea because our leaders are just too corrupt and stupid to pull it off, but he brings up exactly what the problem is.
Comment #48.
When I entered banking in the 1950’s we had community banks. I can remember when we had to search for other banks to participate when we got borrowers seeking loans bigger than we were authorized based on our capital. Now we look like one big bank although they do spread it around a little to reduce that look. We had 3 to 4 times the number of banks then as now plus loads of S & L’s, though they were frequently corrupted family run mutual institutions and too specialized in short-term savings and long-term lending.
This is the video I was talking about. It’s 11 minutes long. There are others like it.
If you read that article, Arthur Burns was the primary guy that started the inflation in the 70s.