Jump to content

DaCraw

Atomican
  • Content Count

    498
  • Joined

  • Last visited

Everything posted by DaCraw

  1. DaCraw

    Australian Bureau of Statistics can kiss my hairy ….

    Yes and no, AD. The questions you pose are indeed also useful, but useful for analysing a different area. The first two questions are useful for looking at what proportion of your income you spend on your trade, verses what proportion you spend on yourself. It's also useful when looking at the total capital stock in an industry, etc. The second set of questions are tailored to a different area of inquiry - whether that level of captial stock is sufficient to provide an efficient use of the labour available. This area is also important, but was probably covered by a different survey. As for your suggestion, that's a policy issue. The job of the ABS is to provide data, not policy. They are asked for facts (how many people are unemployed, how much did our economy grow last year, how are prices changing in aggregate, etc) and analysis (what does this number mean), rather than policy (what should we do about those numbers). There is a vast difference between a statistical survey and a political survey or poll.
  2. DaCraw

    Looking for a Game

    Well, since you enjoyed Diablo 3 and Torchlight, have you considered Torchlight 2? With that out of the way, I'd recommend Shadowrun Returns. The Dragon Age series may also be worth a look. Your other option would be to explore old school RPGs. GOG.com is your friend here. Particular highlights that have aged well are Planetscape:Torment (not really focused on character build, but definately one of the best RPGs ever made), Neverwinter Nights / 2, Knights of the Old Republic / 2, Diablo 2, Baldur's Gate / 2 (recently rereleased). [edit]: D'oh, just saw the "but is more current" part. Shadowruns Returns (and the Berlin expansion Dragonfall) is probably my main recommendation, then.
  3. PROTOCOL AGAINST THE SMUGGLING OF MIGRANTS BY LAND, SEA AND AIR, SUPPLEMENTING THE UNITED NATIONS CONVENTION AGAINST TRANSNATIONAL ORGANIZED CRIME Quite a bit in there. [...] Um, did you read that document? It kinda refutes your argument. I will admit that I haven't done a full search for any reservations we may have lodged, nor have I read through all of the ICJ records which would clarify the interpretation of this treaty, so I could well be wrong - but a plain reading of the text implies that it was intended to allow for the humane treatment of asylum seekers. I don't want to get into a blow by blow, but here are the main points: I'll start with the big one. Your argument is essentially that we are obligated to deny these people their rights as asylum seekers because we have an obligation to deter people smuggling. However, the treaty you cited to support this obligation includes the following clause: Basically, States can't use this treaty to try to get out of their other obligations, and people do not lose their status as asylum seekers simply because they pay a smuggler. Now, let's look at what the treaty actually requires us to do. Article 5 explicitly excludes migrants (or asylum seekers) from criminal liability under Article 6. Article 6 basically requires us to make being a people smuggler illegal. No argument there. However, it does not require us to make seeking asylum by boat illegal. It is clear that the treaty regards the migrants (or, in this case, asylum seekers) as victims rather than criminals. Article 7 requires us to cooperate to reduce smuggling. This must be read in the context of Article 19. We need to work with our neighbors to deal with people smuggling, but not at the expense of asylum seekers' human rights. Article 8 gives us the right to board a ship if we think that it may be being used by people smugglers. Article 9 requires many things that aren't relevant to this discussion, but it also includes this gem: There have been many claims about our detention system that would suggest that we are failing this obligation. Article 10 is not relevant to this discussion. Article 11 requires us to strengthen our borders where possible, although, again, this must be read in the context of Article 19. It even includes an explicit proviso regarding obligations of free movement (more relevant to Euro countries, admittedly, but still interesting). Article 12 is not relevant. Article 13 requires us to assess any travel documents within a reasonable time. Although this is not directly relevant, the current policy of delaying assessing asylum seekers claims may inadvertently breach this article. Article 14 is irrelevant. Article 15 is not particularly relevant, although it does imply that cutting aid to our neighbors could be a breach of 15(3). Article 16 requires us to protect the rights of migrants who are the objects of the acts listed in Article 6. This includes their rights as asylum seekers. Article 17 is irrelevant. Article 18 says that a State must accept their citizens/residents back if we return them. This does not give us the right to return them is this would amount to refoulment (see Article 19). The rest of the articles are largely formalities. As you can see, the treaty considers the people being smuggled as victims, not criminals. It explicitly requires us to honour our obligations to them as asylum seekers, and imposes additional (albeit redundant) obligations to treat them humanely.
  4. How do you know that the unemployment level was caused by a panic?That would be covered by the impact on output noted in the first image, and the first link. Are you seriously contesting that banking panics would not occur in the absence of fractional reserve banking? What regulation?I'm arguing that without fractional reserve banking, pretty much everything that we rely on in a modern economy goes up in smoke. There are problems with it, but they can be corrected with suitable regulation, such as requiring banks have deposit insurance, and having the central bank act as a lender of last resort. Bank panics are a solved problem in the modern economy, but getting rid of the reserve bank would undo that. Yeah: to assist in trade, not to force everyone to use worthless fiat currency that the central bank has a monopoly on creating and manipulating.Well, it turns out that fiat currencies are very useful for trade, and that careful control helps to promote economic growth and stability - which are also massively beneficial. I disagree that it is a waste. If it is being used as money instead of sitting in a vault doing nothing then what is the problem with that? One might even say that it is being very useful in serving as money.But fiat money can do the same job without tying up resources. Using resources when you have a perfectly good way of getting the same job done without them is wasteful. Can you back that up?Look at pretty much the entire history of western civilisation. I'm not as familiar with non-European history, but China used a fiat system throughout a couple of its dynasties. That would put it at 4-500 years. Do you have a point?
  5. The first is a list of banking panics under the gold standard, the second shows the effect that one of those panics had. Not really, no. The problem is lack of (appropriate) regulation. If you get rid of fractional reserve banking, you pretty much get rid of modern banking entirely - and pretty much all of the benefits of a modern economy along with it. Sustained, stable growth doesn't just happen. Your claims are basically saying "I don't like the fact that pills are bitter. I think we should get rid of medicine, and be free and pure in our bodies. Why don't you like freedom and purity?" It sounds absurd, I know, but really, so does what you're saying. In the absence of legal tender, I wouldn't be happy receiving either of them. Here's the thing, apart from a few mechanical differences (resulting from tying your money supply to a basically random process, pegging your exchange rate to a commodity, etc) money - by definition - works the same way. It's basically an abstraction, a token representing wealth that has value because we all agree that it has value. Whether or not the token could be melted down to reclaim the metals it's made from doesn't change that. In either case, I'll accept it as payment because I know that I can exchange it for something else. Of course, that's not what you're arguing for. You're arguing for the abandonment of currency altogether. In which case, no, I wouldn't accept gold either, because I couldn't be sure that I will be able to get what I want with it. I'll take a pizza instead. You don't have a pizza? Hmm, if I trade with that guy for a chicken, then trade the chicken for a bag of dog food, then trade the dog food for some beer, I might be able to use the beer to get a pizza. Wait, how much dog food can I get for a chicken? This isn't going to work. I guess you'll have to do without this medicine. We invented currency for a reason. Store of value refers to the ability to facilitate the intertemporal transfer of wealth. The stability and predictability of the currency factors into this too. It doesn't mean that the money you've stashed under your bed should buy the same amount in 50 years as it does now, it means that you should be able to use that money as a liquid and safe asset (even if it has a slightly negative interest rate due to the liquidity and lack of risk). How much will this $100 bill buy me this time next year? About as much as $97 would now. That's a useful asset. It's not something I would invest in long term, but it's useful in the meantime. How much will this chunk of shiny metal buy me next year? I dunno. Less useful. I could speculate with it, but that's basically gambling. But never the less, in order for any to be used as money, some must be diverted from it's current use. That's a waste by definition. Here's the thing, history has shown us that in the absence of regulation, power tends to concentrate in the hands of a few. Progressive, redistributive taxation wasn't invented until revolutionary America*. Name any period before then, and look at how 'free' the median person was. They were basically slaves, either explicitly or implicitly (slaves to poverty). We live in some of the most prosperous and free times in all of human history, in part because we've designed ways to curtail the freedom to oppress. There are legitimate threats to this, but universal healthcare is not one of them. *Interestingly, modern progressive taxation was invented to protect freedom. The Americans were afraid that left unchecked, wealth would concentrate into what was essentially an aristocracy, just like in Europe. So yeah, taxation was designed to make us more free.
  6. We've been through this!We ARENT! Save your breath, man. Not a single syllable has penetrated fajw's cranium in the entire length of the thread. A few words more ain't gonna make a lick of difference. Unlike certain people, who can argue indefatigably and indefinitely but also state a cogent argument, this guy just keeps repeating his initial assertion without modification or embellishment. Talking to him is a waste of time. I'm not really trying to convince fajw. That's a lost cause, as you've pointed out. I'm just trying to make sure that no-one else is mislead by his deluded rants.
  7. Do you have historic data regarding the instability of the gold specie standard in the absence of central banks? Lots of people have bullion today, "tying up useful resources". What is wrong with that? What does the economy "falling apart" mean? Why would it happen? Banking Panics in the US: 1873-1933 GOLD, FIAT MONEY, AND PRICE STABILITY It makes it more suitable because the person on the receiving end of money/currency doesn't lose out and so wealth is not leeched away.The person is receiving a token that they can exchange for goods or services. Exactly the same as if they instead received gold for the sole purpose of subsequently exchanging it for goods or service. In what way is wealth being leeched away? You really need to actually explain how you think things work. Loss in purchasing power of 1100% between 1966 and 2013 is not what I would call a good store of value. Compare that with gold. In the absence of legal tender legislation if Gina Rinehart had all the gold I'm sure people would use something other than gold and there would be no problem. How is monetary policy used well "to deal with shocks" and what does that mean? Can you elaborate on point 2? Can you provide the historical data for point 3?Average inflation over your stated period was 5.4%, although it did include a period of high inflation in the 1970s. The thing is that the inflation rate did not tend to swing wildly (again, with the exception of the 70s), and so was predictable. Stable inflation can be factored into investment decisions, and so is not a problem. Thus it is a good store of value (as I know roughly what it will be worth, and can make decisions accordingly). Under the gold standard, however, the price level was very unstable and was essentially unpredictable (see the NBER paper linked above). Here's a good explanation of how monetary policy can deal with crises. See above for the historical data. So you object to people having bullion today? What's the difference? I put it to you that there is enough for money and other practical uses.It is being speculated on as a commodity, sure, but that's no reason to incentivise taking more of it away from productive use. Where did you learn about this "history"? It is better and more democratic to have the people free to vote with their money. If people have the will to help each other out then they will do so whether or not it is enforced by government. In what way is providing healthcare to people (a policy which is immensely popular) undemocratic? I don't think you understand what that word means.
  8. Sigh. Here we go again. Ask the people who are buying gold. There is a market for it. It tends to be what the free market chooses for money AFAIK. If you know of a better form of money let's hear it.Fiat money. It's more stable, it doesn't tie up useful resources, and it allows us to use monetary policy to keep the economy from falling apart every few years. It makes it valuable.And why does that make it more suitable to being used as money? Which of the three roles does that improve? Again, be specific. The fiat currency we are using is not good for a store of value. No one should have control of the money; we should be free. Why would frequent depressions occur?Actually, fiat money is suitable as a store of value. I know that my money will be worth approximately 2-3% less in one years time. That stability allows me to plan my investments according to my risk and liquidity preferences. Using gold, with its volatile price, would add an extra level of risk to this. It would still work, but not as well as well as fiat money. How does having a central bank keeping the money supply stable make you less free than having the money supply be determined by Gina Rinehart? As for why depressions would happen, it would be because: 1) We would be unable to use monetary policy to deal with shocks 2) Changes in the gold supply (such as a new seam being discovered) would create additional shocks 3) We know from history that they did. Frequently. Like I said: the point is the owner of the gold can do whatever he/she wants with it, including turning it into jewellery. The fact that it is in a vault does not mean it has to stay there. No, but some of it must be kept out of productive use to be used as money. The only way that no useful resources would be wasted is if no money was ever used. Does that sound even remotely likely? What's the problem? Why do you think we invented currency in the first place?To deal with the double coincidence of wants problem. Please try to keep up. This one sounds innocuous but is actually one of the most shocking things I have ever read on this forum. There are many diseases which are life altering - or indeed life threatening - but nevertheless not infectious. Cancer would be one example. According to fajws logic, if you're poor and get cancer, you deserve to die. Painfully. "I'm sorry, but the biopsy returned positive. Your daughter has cancer. The good news is that this form of cancer is easily treated, and post-treatment prognosis is usually good. The surgery and post-op care should cost around $xx,000. She may also need a round of chemo after that." "Oh god, we can't afford that." "Well, if it's not removed, the cancer will spread. I'm afraid all we can do is make her comfortable." This sounds extreme, but the US has shown that when people are expected to pay for their own treatment out of pocket, those who cannot afford health insurance will tend to delay treatment until they're forced to go to the emergency department at their local hospital. This actually costs the taxpayer more than if the problems had been treated earlier, as 1) emergency care is one of the most inefficient ways to provide medical care, and 2) by the time they present the problem has progressed to a much more complex (and expensive) stage. Fajw's proposal sidesteps this, however, by not providing government funded emergency care either. Thus the poor are left to die in the gutter. The lack of empathy this suggestion represents is absolutely monstrous. "Fuck you, got mine" doesn't even begin to cover it. How about you fuck off or don't lie? I am not saying poor people with cancer deserve to die. I am not saying we should not help each other out. I am saying that a man who works hard to provide for his family, pays for private health insurance and private schooling should be forced to pay for bludgers' health care. It's not like I am proposing to make charity illegal.Again, history shows that charity cannot provide sufficient healthcare to a society, and that was before we discovered many new lifesaving but expensive techniques. You may not like it, but having those who can't afford private insurance (ie the poor) die or have their lives ruined by preventable diseases is the natural result of not providing universal healthcare. Charity steps up in some cases, but not nearly enough.
  9. You know, I'm getting bored of the gold standard debate. Fajw's 'claims' (or, more accurately, assertions) have been pretty thoroughly debunked. Lets move on to another one of his suggestions: This one sounds innocuous but is actually one of the most shocking things I have ever read on this forum. There are many diseases which are life altering - or indeed life threatening - but nevertheless not infectious. Cancer would be one example. According to fajws logic, if you're poor and get cancer, you deserve to die. Painfully. "I'm sorry, but the biopsy returned positive. Your daughter has cancer. The good news is that this form of cancer is easily treated, and post-treatment prognosis is usually good. The surgery and post-op care should cost around $xx,000. She may also need a round of chemo after that." "Oh god, we can't afford that." "Well, if it's not removed, the cancer will spread. I'm afraid all we can do is make her comfortable." This sounds extreme, but the US has shown that when people are expected to pay for their own treatment out of pocket, those who cannot afford health insurance will tend to delay treatment until they're forced to go to the emergency department at their local hospital. This actually costs the taxpayer more than if the problems had been treated earlier, as 1) emergency care is one of the most inefficient ways to provide medical care, and 2) by the time they present the problem has progressed to a much more complex (and expensive) stage. Fajw's proposal sidesteps this, however, by not providing government funded emergency care either. Thus the poor are left to die in the gutter. The lack of empathy this suggestion represents is absolutely monstrous. "Fuck you, got mine" doesn't even begin to cover it.
  10. Just make sure you don't live next to a bank :p
  11. Rubbish. So, you're claiming that whether something has other uses changes how well it works as a currency? That's a pretty bold claim that you're going to have to back up. In what way does it work differently? Be specific for once. No; it is valuable whether or not it is used as a medium of exchange. But we don't care about whether it's valuable or not, we care about how well it would work as money, and whether there are any drawbacks to using it as money. Money has three basic roles, as a medium of exchange, as a store of value, and as a unit of account. You've yet to demonstrate how gold is any better at these roles than fiat currency. Since we've shown that there are significant drawbacks to using gold (such as losing control of monetary policy, experiencing frequent depressions and deflation, etc) it would need to be significantly better than fiat currency for your claims to be justified. Rubbish. There is no reason that gold in a vault can't be used for other purposes. So you've discovered a way that a given atom of gold can be in two places at once? If a bar of gold is being kept in a vault or is being used as coins, then THAT BAR cannot also be used for electronics. Are you even trying any more? Then you don't understand why we invented currency in the first place. I thought you wanted to send us back to the 1850s. I just didn't realise you meant 1850BC.
  12. Well, whether something has other uses doesn't change how it works as a currency. It's still only useful as a medium of exchange because people believe that other people will accept it in payment. This is true whether we're talking about gold or pieces of plastic. There are other roles for money (store of value and unit of account), but inherant value as a concept is even less relevant to those. And no, gold isn't any better at those, either - it's too volatile. That said, the fact that gold has other uses is actually a strong argument against using it as a currency. Gold that is minted into coins or stored in a vault somewhere is gold that can't be used to make jewellery or electronics. Fiat money works just as well (actually better) as a currency and doesn't tie up useful resources in the process. To paraphrase Adam Smith, it's as if we could build our roads in the sky, and thereby release the underlying land for more productive uses. He was talking about using gold-backed paper money instead of gold itself, but the logic still applies. Controlling the rate of growth of the money supply is important because it lets us control the money-market interest rate (the LM curve) and the long run inflation rate. The former helps us to keep the economy close to full employment in the short run, while the latter allows us to maintain stability over the long run. So yeah, kinda important.
  13. Thank you MS, as are you. Well, I haven't had time to trawl through the case law to confirm the legal situation, so I wasn't going to comment on that. That said, I don't have any reason NOT to trust the RBA website - this is just a debate on a forum, not an actual legal proceeding. :p
  14. I was just going back through this topic and saw this post. Wow. Have you done the math? If so please share and we can go off the gold standard. I don't know about MS, but I have done the math. As has anyone who has studied undergrad-level economics (or possibly high-school level economics, depending on the syllabus). Given that you couldn't recognise a simple production index earlier in this topic, I'm guessing that's not you. I'm not going to do the math at length here, as these forums don't handle formatting equations well. If you're actually curious, though, I can recommend some good macro textbooks. [edit]: upon rereading, I may have been a bit harsh there. If you're genuinely curious, though, I am serious about the textbooks. How comfortable are you with maths (mainly calculus)? (Monetary) inflation is money creation and I don't think it has anything to do with charging interest. Currency is a subset of Money. Honestly, I'd thought you would know that, as it's one of the things goldbugs usually bang on about (for no good reason, but that's never stopped them). That said, a non-zero inflation rate is actually a good thing, provided it is still small and stable. There is loss of consumption per capita due to inflation, but the difference in average consumption between an economy with 10% inflation and one following the Friedman Rule (where nominal interest on riskless securities =0, which is actually slightly deflationary but minimises the lost consumption ceteris paribus) is about 0.36% per year. However, the latter economy would, by definition, be in a perpetual liquidity trap - which we know to be disastrous (just ask the Japanese). Many important economic processes shut down in a deflationary, zero lower bound constrained economy, so the minor gain in efficiency due to optimal monetary policy is outweighed by the losses caused by having your economy implode. The key, then, is to ensure that inflation is kept at a low but stable level. In Aus and the US, this is 2-3% per year. In Europe, they target close to but less than 2%. I'd actually advocate an increase in our target to 3-4%, as the fallout from the GFC in the US has shown that hitting the zero lower bound to be more problematic than we previously thought, so having an extra buffer would be worth the loss of efficiency (remember, real = nominal - inflation, so higher inflation means a lower real interest rate for any given nominal interest rate). In any event, being able to actually control the money supply is crucial to maintaining stable inflation while avoiding damaging periods of deflation, because i = x in the long run (the long-run average inflation rate = the rate of growth of the money supply [note that this is more than just M0]). Gold is not like the currency we use. If you want to try and trade with bits of plastic that's fine with me but I don't think there should be legislation to enforce it. Why is gold not like any other currency, apart from the fact that we can't control how much is made (which, as noted above, is kinda important)? Yes, I have. All 4 were assigned reading at one point or another during my BEcon. As for legal tender legislation, yes I do think it should exist. As I've said in previous posts, in order to avoid the double coincidence of wants problem, you need either a law or a social convention requiring everyone to accept a certain currency as payment in exchange for goods or services. Given all of the other benefits of fiat money (notably the ability to stabilise the economy with monetary policy), I think that legal tender legislation is the best way to go about that.
  15. That is BS. Well, I'd start with Golden Fetters by Barry Eichengreen, A Monetary History of the United States by Milton Friedman and Anna Schwartz (this was the book reviewed by Bernake in the speech you linked, btw), the speech you linked (seriously, read it in full - especially the section on the gold standard), and a macroeconomics textbook or international economics textbook - I'd recommend International Economics by Paul Krugman and Maurice Obstfeld, but that's personal preference. From there, I'd recommend looking into New Keynesian macroeconomics. I'll let you do the research on that yourself [edit]: If you're wondering why most of those books are talking about the Great Depression, it's because that was the time when most countries were finally forced off the gold standard for good. Understanding what was going on then will help you to understand why this was, and why going back onto a gold standard would reintroduce these vulnerabilities.
  16. What properties do they have that you think make them "the obvious choice"? Again, please be specific. No, the person receiving the fiat currency is getting something that they know that they will be able to exchange for something else. No wealth is being 'leached away.' If we used gold instead, this would be exactly the same (unless the person was a jeweler or a scientist) - they would be getting something that was only useful to them because they can use it to buy other things. Of course if there was no obligation to accept gold in payment then they really would be getting shafted, as they have to hope that someone will accept their gold as payment for whatever they need. All that would accomplish is to reintroduce the double incidence of wants problem. [edit]: This is of course ignoring all of the problems caused by losing control of monetary policy, the legal restrictions that would (almost certainly) be imposed on the ownership of gold, etc etc.
  17. "That specific issue" - you mean actually justifying your claim? Stop trying to diminish or avoid it.
  18. Yeah, we have. Look back a few pages. You yourself linked to a speech about how monetary policy was a very important tool in preventing depressions. But leaving that aside, you still haven't actually made a case for why you think it would be a good idea. So I ask again, what positive effects to the economy do you believe that adopting the gold standard would achieve? And, to reiterate, please don't just say that it has value, therefore it is good; be specific. In what ways would a gold-standard Australian economy be stronger, more resilient, or otherwise better than our economy under the AUD, and what flow-on effects would this have? If you have an actual case to make, this should be a Dorothy Dixer. If not, well...
  19. Let's turn this around. Quite a few posters have shown why a metallic standard currency is a bad idea. Fajw, what positive effects to the economy do you believe that adopting the gold standard would achieve to offset this? Please don't just say that it has value, therefore is good; be specific. In what ways would a gold-standard Australian economy be stronger, more resilient, or otherwise better than our economy under the AUD, and what flow-on effects would this have?
  20. Where did you get your quote, MS? Do you have a better source that you could cite in favour of your claims?
  21. Depends, can I instantly trade said gold for the fiat its worth? If not; then no. Its heavy, it take a LOT of work to purify it. No one will take it off me directly in the country I live in. I would most def have all the gold in the world for a dollar. I'd make a set of solid gold armour out of it, like a lannister. Then id barter certain parts of the armour im wearing for meat pies and orange juice. Well, I can't speak for MS, but I read the $0 value statement as hyperbole, rather than a literal statement that gold would hold absolutely no value to him. His point was that under a completely "free" barter system, there is no obligation for people to accept gold in payment for something. It may have value to a jeweler or a scientist, but the only reason I would accept it in payment for my services would be if I was sure that I could exchange it either for whatever it was that I need, or for something that I could then exchange for whatever it was that I need. In a free barter system, this is quite costly in terms of the time and effort needed to find someone who will accept gold (or an intermediary) in exchange for things I want. Thus I would demand a substantial premium to compensate me for the extra effort. The only way around this is if there is either a law or a social convention that gold is accepted as a universal medium of exchange. At this point, though, the value of the gold is derived from that law or social convention. Gold would only be valuable to me because I trust that the law or convention will be upheld, otherwise it's just a useless (for me, at least) lump of metal. Sound familiar?
  22. I don't know much about the volatility of gold or silver. Is fiat currency any less volatile?Much much much less volatile. On average, $1 of fiat currency will buy me ~2.5% less goods each year. In other words, it fairly regularly devalues at 2.5% per year. By comparison, the amount of goods that I can get for 1gram of gold varies enormously each year. Rob. How do you know it is gold and silver that is volatile rather than what it is measured against? First off, he showed you exactly why we know that Gold is volatile. We assess value in terms of what we could exchange a unit of a good for. If we aggregate all other goods into a bundle, O, then each year 1 dollar will tend to buy 2-3% less O than it would have 12 months earlier. How much O you could get for one unit of gold, however, varies wildly. Another way of looking at this is that the price of dollars (in O) only changes by 2-3% per year, while the price of gold (again in O) is MUCH less predictable. Thus we say that the dollar is relatively stable, while gold is relatively volatile. If you're still not convinced, here's a simple experiment: compare the volatility of gold or silver against that of other commodities. If the volatility in the price of gold were driven by volatility in the dollar, then we would expect that movements in the price of other commodities with similar levels of volatility (read: same order of magnitude) would also be driven by volatility in the dollar. This would imply that all commodity prices would tend to move in the same direction. Any good that did not would necessarily have much higher volatility (as it would need to outweigh the changes in the dollar). Looking at the data, we see that commodity prices are largely independent of each other, except where one commodity is an input into the production of another (the price of oil affects the cost of mining, and so impact on mineral prices). From this we can conclude that the volatility is in the value of the commodity (ie gold), not the dollar.
  23. DaCraw

    (Public Announcement) Heartbleed bug

    I've also been using KeePass for a few years. It does have an autotype function (default is ctrl+alt+a), although I can't remember whether it's on by default or whether you have to enable it in the options. If that fails, copy and paste works well, especially since you can copy by doubleclicking without having to view the entry.
  24. It looks like a very amateur graph. What is the y axis? Why use data from only such a short period of time? How about when the central bank didn't exist? First off, nice deflection. You managed to reply to my post without addressing any of the substantive points made. Did you actually read the speech you linked? I'd be very surprised if you did, because it argues that the Great Depression was caused (and could have been prevented) by monetary policy. The disastrous policies were driven in large part by a desire to remain on the gold standard. Once the various countries left the gold standard, they were able to use monetary policy to help bring about the recovery. One of the key problems with the gold standard is that it takes monetary policy out of the hands of central bankers, and so prevents the use of stabilizing policies to prevent or recover from crises. "We did it" means (among other things) "We stayed on the gold standard when we should have been using monetary policy proactively." Also from your link, in the concluding paragraph of the section "The Gold Standard and the International Depression": Oh, and as for the graph, the y axis is an index of industrial production, with 1929 = 100. This is standard practice when dealing with output. As for the time period chosen, it's a graph of the comparative output of various countries during the Great Depression. Pre-central-bank eras are not really relevant to that.
  25. Currency can't be based on gold, silver or any other mineral. The price is too volatile. International trade would become a farce. Indeed. Fiat currency is the current model because inherent-value currencies have been tried and found wanting. Fiat currencies are inherently worthless by design. If the material from which your currency is made becomes worth more than its face value, people destroy the money to get the material (look up "coin clipping") - effectively ruining your currency and your economy. In what way have inherent value currencies been "found wanting"? What do you mean by "If the material from which your currency is made becomes worth more than its face value"? A gold or silver coin of a certain purity and weight has one value. Well, a very strong argument has been made that the fact that most countries were on the gold standard was one of the main factors behind the depth and worldwide nature of the Great Depression. The short version is this: for various reasons, the US and France experienced large financial inflows in the early 1930s. By 1932, they held roughly 70% of the global monetary gold stocks. In order to protect their dwindling supplies, the rest of the world were forced to engage in domestic asset sales and raise interest rate. These contractionary policies left them particularly vulnerable when the stock market crashed. Further, most countries were unwilling to bail out their failing banks, for fear of increasing private claims on their gold reserves. People complain about the banks being bailed out without repercussion in the GFC, but failing to bail them out in the Great Depression caused FAR more economic damage. Probably the best evidence for the disastrous effect that the gold standard had on Great Depression era economies is the clear correlation between when a country left the gold standard (and they all eventually did) and when they started to recover. Coloured lines begin when each country left the gold standard. Correlation may not imply causation, but we have a fairly clear theoretical understanding of why this would be the case. Slumping economies require expansionary policies to kickstart their recovery. The gold standard prevents the global increase in money supply, which is necessary for monetary policy to be effective when dealing with a global recession. If anything, a global recession would force central banks to sell domestic assets to compete for gold reserves, effectively reducing global money supply. As the 30s demonstrated, contractionary monetary policy is a bad idea in a recession.
×