Fiat Money & You: Why The Occupy Wall Street Campaign Represents the Battle of Our Lifetimes.

What would a modest amount of inflation be?

1.5% or less.

That equals a doubling of the money supply in approximately 46 years, and as long as the population doubles in roughly the same time, that seems reasonable.

Ask the citizens of Zimbabwe where a loaf of bread costs a million dollars how they feel about fiat money,

Yes, 1.5% would be awesome in a balanced economy.

Situations where debt is rampant, a higher rate is acceptable, even 10-20% would be good, as long as INCOME distribution remains balanced.

Shook's, come on chica.

It is QUITE reasonable that in 46 years we will be producing at least twice what we produce today. That being said, inflation means that cash comes into the economy FASTER than the growth of value of the goods in said economy.

So even if it was twice as much stuff, it would still cost twice as much.

That doesn't matter, though, as inflation hysteria is a red herring. It distracts from the true problems that face this country and the world: lack of equitable wealth distribution.

DEBT is is the word of the day. The debt paid on US Bonds is distributed back into the treasury. Durrr.... where did you think it goes?

Further, the "debt problem" in this country has a converse which is a "glut at the top problem." Who do you think is getting all of those rent payments, mortgage payments, profits from companies? The rich, not you and I; not the government.

Finally, inflation is the way out of the debt problem. It hits people with monetary assets like mortgages, investment instruments, etc., (the rich) harder and the people with real estate (the underwater middle class) get the benefit of it.

Renters and working poor net zero as long as the government keeps competition healthy and employment high.

Quit wasting your time on this issue and focus on what really matters.

Boom! Zing!

You got me!

(end sarcasm)

"lack of equitable wealth distribution."

that does say it all, but don't forget the potential of one political party would control all the banks in the U.S.,determining exaclty who and how they should lend.

Another reason why taxes are so important.

I couldn't possibly disagree with your statement more. Inflation creates the inequalities and inequitable wealth distributions in the first place, so it is impossible for it to also be the solution.

I believe we are both trying to solve the problem that really matters (the working class keeping more of their wealth and the benefits of the fruits of their labor), but we have a fundamentally different approach of how to go about it.

You are looking for short-term fixes and I am looking to correct a systemic problem. In the end you will probably win.....short-term solutions almost always seem more attractive compared to fixing the real problems.

Sigh, How? How does it create inequalities?

I'll agree that taxes certainly don't remain forever, where as a fiat monetary system is more durable.

Anything we can do to level wealth distribution is awesome:

Requiring companies to post wages that they pay to everyone is a good start.

Requiring companies to provide healthcare or just having single payer, helps.

Taxing the uber wealthy helps.

Eliminating fiat currency so that the government can't take out credit to fund future projects? Not so much.

Fiat currency is NOTHING compared to gold standard at creating wealth inequality.

You're right. Fiat currency isn't bad per se, but a debt-based one that puts private bankers in control supported with fractional reserve rules, is.

The only reason emerging economies and developing nations use our currency is because of it's legacy as the last one standing after WWII. However, that's fading fast and will eventually come to an end.

Where you continue to get Gold as the automatic replacement when people point out the horrible system we currently have, perfectly sets up the "either-or" argument. Just because a debt-based fiat and fractional reserve rules are wrong doesn't automatically mean someone wants Gold as the replacement. Please stop trying to conflate the two.

That always seems to be the common debate honestly (Gold vs. Fiat). What I will say is that yes, debt is obviously bad but I don't think it has so much to do with monetary policies than political policies since thats what drives things like tax reforms and how money is distributed. Yes, bankers and corporations buy our politicians in order to make sure large number of financial and bank reforms remain non-existent. Now, I will be controversial and say that there isn't anything wrong with money being produced by one institution. The reason why is because if we had a variety of institutions making the money, then it would become worthless very quickly since it wouldn't be so easily obtainable. If I can only get something from one place lets say, then the value of that object is worth more overall due to the fact that I can't get it anywhere else. The way money is being constantly printed at the moment is slightly concerning but I wouldn't say it is the primary concern economically speaking.

If you do not understand how debt intersects with our monetary policy or that constantly printing money is only "slightly concerning", you do not understand our monetary policy at all.

With the exception of coins, debt is our money. No debts = no money as we currently know it. You seem like a nice person and I don't want to come off as being unduly harsh towards you, but if you think that political or tax policies come secondary, you are mistaken.

Also, there is nothing controversial about each country having one currency issuer (which should be the state itself). I think you accurately identified what happens when we have a variety of institutions issuing (like we have now)......it quickly becomes worth less as time moves on. The point I try to make is the need to reverse this.

but to be fair if not gold, what is the standard? A currency that is directly related to the work that needs to be done. Who decides what work needs to be done, some planning commission in the white house? I mean this sincerely, not as put down, but that sounds like communism to me.

Your straw-man sounds like communism to me too.

I think the standard that should be considered is a standard that sets an amount of money per person in circulation. What that amount is entirely depends on when it is instituted, but the money supply should be principally adjusted in accordance with population changes. I would be willing to entertain provisions from there, but this should from the base of the policy.

you are arguing the part is bigger than the whole. That is the argument is taking one small pattern or system, the exchange of value between parties, and fixing that precieved problem will address all issues of value. When in fact it is very complex system that determines value and it is often arbitrary. Plus I can't help but think of Cuba, and North Korea, and not because they are communist. First, Cuba is a problematic case for your theory. As Cuba per-capita have more doctors than in any other nation in the world, but the fact is like NK, Cuba is extremely underdeveloped nation and suffers from poverty. For both nations, the government could not address all of their citizen’s potential value in the market, and thus essential everyone is poor.

Forgive me, but your comment doesn't appear to make any sense. What are you trying to say?

Governments can never be big enough to address all of their citizen’s potential value in the market place,

The non-fiat system would not be able to adequately value cultural worth. Who is to say a football player is not worth more than a doctor. And personally, I would rather a rich super star, than a rich police officer or army general.

Cuba is an excellent example of this. With all those doctors, the society obviously put a lot into education, but nothing into supporting sciences and into cultural endeavors that make life worth living. Plus the value of that human effort is arbitrarily decided, and is often times an inefficient use of money. So how could any controlled system adjust for popularity (inflation), how could it pay the star what they are worth to their fans, how could the system account for variation and choices, maybe someone would like expensive chocolate over an apple?

In grand scheme of things,I am not a big capitalist supporter, but as long as the very rich pay their taxes, it tends to balances out the economy.

I agree. The main problem with the gold standard is the same bankers in control of the system now, own the gold. If we change the system on the surface, then allow them to control the basis of the economy (gold), you have simply moved from one system to another but the same group still controls the economy.

If we bring the system back to the days of Lincoln with currency issued by the government at no interest and don't flood the system with cash, we can limit the inflation rate rather easily and we take the bankers out of the equation. If we continue to let the Fed print money and issue it with interest at extraordinarily high rates, we will continue a downward economic spiral as the system is unsustainable.

Just think if you were to loan out $100.00 you didn't have and charged 90% interest. You'd be in jail. Why is the Fed still in business?

"back to the days of Lincoln with currency issued by the government at no interest and don't flood the system with cash", the reason it worked, because there was a war. Furthermore, the government does give 0 interest loans, they are called grants.

My question is would a agent of this non-fiat government give money to Brittney Spears? Would they give money to produce widgets? And If they did give money for widgets, would they also give money to produce widgetZ? And would the producer of widgets not complain?

I never mentioned anything about loans so I think you misconstrued the meaning of the post. We would no longer have a central bank issuing currency. It would instead be issued by the government. This currency would not be a loan, it would simply be legal tender, the same as the currency we have today without having to pay a central bank any interest to use our money.

Go, Dennis, Go.

Sounds like a good idea. I need to look into the detail more.

Most people I talk these days have a solid sense that they are getting royally screwed but either struggle mightily to describe who's doing it and how, blame the wrong things or the wrong people, or freely admit that they don't know.

So what can you do about it?

Educate yourself and then educate others. Make sure you vote in the PRIMARIES for people that have also identified the true problem. Write and call your State and Federal Representatives weekly. And lastly, seek out organizations in your area that are working to bring the root injustice into the light and be ready to peacefully protest when the opportunity presents itself.

"Most McDonald's workers I know do not pay one dime in taxes"

Everyday while driving from job to job I hear so much about how many in this country do not pay 1 dime in taxes. Does everyone forget that each paycheck has a certain percentage taken out that goes to FICA? True, when filing taxes, over half of the people get this money back, plus more.

But, what happens to that money for a year? That money goes into banks where it earns interest. Consider taking that small amount from every McDonald's worker's paycheck and consolidating it all into one large sum. That would draw one hellish amount of interest before having to be paid back out in the form of income tax returns.

Cop out? Ah, I see - the old hope a dope routine.

The TRUE problem HAS BEEN IDENTIFIED, reform has not addressed it, will not address it, because the cause of it - WALL STREET - owns the Dems and the Repugs both! How's that for solid blame? It takes no struggle to comprehend, it's obvious. Where have you been?

Write weekly letters? Oh boy...

Dear Lap Dog,
Here's my weekly request that I hope your aides won't get too big a belly laugh out of. It sure would be nice if you could tell Goldman Sachs to stop plundering the world even though they give your party millions and millions and little Timmy and ole Larry are in charge. But Gosh 'o' Golly Fishcakes, we sure are getting' pretty tired of PB&Js!
Yours Truly,
Virginia

Well I can see nothing changes. Hope and the Repug fear card from the Dem Tru-believers and Hate and Fear of Socialism from the Repugs - divide and conquer from the MSM, and the banks laugh us all to the poorhouse, which has been privatized.

The opportunity to protest is NOW, TAKE IT!

Great comment. Thanks. ^'d

Thanks for the link. I've blogged it. This weekend, I'll read it. I'm sure you're right.