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I hate to dumb down the conversation, I love watching you guys get into it, but in response to the OP's actual post:


I'm not sure how old you are or how much influence you parents have on your life but you could try to make a case for learning to manage your own money. it will benifit you later in life, no matter the outcome of silver/gold prices in the future. Perhaps you could propose a 50/50 arrangement with them where you promise to save 50% of your money and spend 50% on what ever you want including pm's? Show you are being "mature" about it and they will be impressed.


I would guess they think coin roll hunting is stupid either because they are either strongly anti PM or they think it is a waste of time and you won't find anything. How do they feel about thier child taking up an intellectual hobby? start a coin collection. learn about and hunt for every date of a certain coin. look for errors. tell them about the US history you are learning along the way. (parents love learning!) If you happen to find any silver along the way well that can't be helped.

You feel you need 30-50 oz every two weeks to be prepaired for the end of the world? Others have posted pro and con opinions on whether holding Pm's will save you or not IF the sky falls, I want to point out a little something different. On these boards and others there are many different social classes as well as people in all stages of their life. You are speaking to 10 year olds and 70 year olds. People in one bedroom apartments and multi million dollar mansions. Do you need to acquire a 100 oz of silver every month to maintain your standard of living if your regular income is gone or devalued?

 

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I don't think its a clear cut as that. Many non-keynsian economists do not agree with a purely monetary supply definition of inflation. To me, inflation is self evident, it is how many more units of currency does it take to buy a certain basket of goods this year versus last. To ignore price increases or demand in a definition of inflation is asinine as it completely destroys the usefulness of the term.

Take a total basket of predefined goods, and if it cost $1000 last year, and $1050 this year, THAT is 5% inflation. Anything else is white tower intellectual postulation that does not help real people deal with the real economy.

Now, does the government play games with inflation figures? Of course, I have been arguing that for 20 years now. I do not think its as severe as the graph posted earlier, nor do I believe the official numbers. The point was brought up by Cloud you have to know the source of your info. While the higher figures were done by those who wish you to buy their service, the official figures are done by the Feds who also have a vested interest. The lower the number they report, the less is cost them in CPI increases. Both parties are vested interests.

 

It was you who said that inflation helps borrowers. This is how this conversation started. Now you have defined inflation as the cost of X goods at some point in the future. Nothing more and nothing less. However borrowers have to pay interest (unless you are a bankster)

So in your example, lets say a party borrowed $1000 to buy that basket of goods now. In one year they sell the basket of goods for $1050, repay the $1000, and they made $50. So by your theory and definition of inflation, it's good for the savvy investor. However, what you absolute miss and what I mentioned above, is the interest rate on the $1000. If it is 10% then at the end of the year, the savvy investor turns out to be, not so savvy. He owes $50. It's absolute proof, using your own example, the fallacy of the statement "inflation is good for investors". You have to consider other factors.

So then you say in response to this. "....but, fatima, no bank could get away with charging that much interest. It doesn't reflect the "real world". Indeed. Yet your example claims that inflation can only be determined by looking at the future so how does the bankster know how much to charge in interest? Do they have a secret crystal ball? In other words, your definition is just as much a fallacy. Hence, your statement that inflation is the amount that something will cost in the future, is wrong. The finance system doesn't work that way.

There isn't anything ivory tower about this. Inflation is an expansion of the money supply, beyond, as Cloud correctly points out, the demand for money. How this affects the real world is complex and can't be meaningfully defined by simple statements. This is what gets investors, including bullion buyers, into lots of trouble. There is vast inflation taking place, but via endless schemes the effects of it are being temporarily mitigated for most people here in the USA. It's good to have the currency the rest of the world must use to purchase oil.

 

Very nice coin show. They called me a little while ago and said that I won a nice Silver coin from the door raffle. See.... those coin show raffles do pay off.

 

You are describing price inflation, not monetary inflation. They are different. One begets the other. Unfortunately this difference is rarely clarified and is a source of confusion.

 

The terms monetary or price inflation were never used until now. Only the generic word inflation. I was just responding to the most common usage of the word. Monetary inflation I find not useful to concentrate on in the absence of monetary demand. You can say the monetary supply went up 10%, but that will tell you nothing without knowing the demand.

 

Here is my thinking Chris. Call it simple heuristics because I simply cannot explain any reasoning in a rational fashion. First of all I would like to say that I do not believe in Keynesian economics. Had WWII never occurred I believe the New Deal to be a colossal failure. The New Deal was given far too much credit towards liberal economics. Regardless if Wartime was a form of centralization, conservationism was actually which helped propel the war effort. People scrapped everything from rubber to metal, and there were even butter rations to support the war effort.

Fast forward to the present and we find ourselves in a predicament. Facts: We have a deficit that is increasing at an increasing rate. We have a population that is increasing. We as in Americans are consuming more than we are producing at an alarming right. The Nationalism that was present in the 40’s-50’s is no longer present (In a global economy the stakeholder only cares about himself/herself.. This equates to the overall goals of the corporation). Once again a firm’s goal is profit maximization for the stakeholder (there is no nationalism or national effort). One top of the stated above you have manipulation of monetary policy on a monumental scale. Quantitative easing has become the 911 to get the economy through one quarter, not a decade. Moving on you have 4 trillion dollars of war debt. Non of this compares in my opinion to the following.

IMHO the biggest threat to the economy (besides our over consumption) is rising health care costs and the aging baby boomer. I do not believe that we have seen 1/100[SUP]th[/SUP] of the cost of the aging baby boomer. The baby boomers are just now reaching the age where they are in dire need of medical insurance and many cannot afford it post recession. Our infrastructure is not setup to sustain cheap medical costs, and prices are going up with oncoming inflation. This in itself is a serious undertaking, but the real disaster is the fact that we have turned to a centralized form of providing healthcare. Medicare/Medicaid is essential for the survival of many, but we simply cannot afford as a nation to sustain long term healthcare provisions. With this being said as the demand for healthcare increases the policies will not change. “take the benefits, just not mine.” As a recipient of free VA health Insurance I can the first one to say I wouldn’t want my benefits to be taken away, but from an economic standpoint it is not sustainable.

These are some of my feelings on the issue, I know they can be viewed as extreme. I surmise that the economic collapse will happen. Who knows maybe in 25 years, but in my opinion the sooner, the better.

 

This was a very short response by the way. Most economics I find liberal when it comes to policy and conservative when it comes to opening up their mouth. More than 2/3 of economists are employed by the Gov. and it is considered taboo to even talk about the subject of a collapse. Granted I'm only a Jr. in College when most economics have advanced degrees, but you can imagine that 95% of aspiring economists read their books, do what they are told, do not think for themselves, and regurgitate erroneous philosophies such as "The Multiplier effect."

 

Economics is a pseudo science at best. Fundamentally, it pretends to be a science of capitalism yet then ignores the fact that monetary policy is decided by the private banking system by design, by a few unelected men whose only qualification is a nomination by the President. Their stated goal is to "intervene" in the free market by whatever tools are made available to them, i.e. currency creation/destruction, in order to achieve a predetermined but known only to them goal. In other words, the winners and losers of our economy are picked by a handful of people instead of the free market and these economists all ignore this.

This is why economists all fail at their "predictions" and why they all either work for the government, banks, or teach. They provide nothing to the real wealth creation portion of the economy but instead only serve to provide cover for the part of society that takes this wealth and re-distributes it. How many economists were held accountable for the housing debacle? Follow them at your own risk.

 

There are many more people professing to believe in Austrian economics than have actually studied it. The Ausitrians do not define inflation as you suggest.

Wikipedia - Ludwig von Mises argues that inflation only results when the supply of money outpaces demand for money:

"In theoretical investigation there is only one meaning that can rationally be attached to the expression Inflation: an increase in the quantity of money (in the broader sense of the term, so as to include fiduciary media as well), that is not offset by a corresponding increase in the need for money (again in the broader sense of the term), so that a fall in the objective exchange-value of money must occur."

The Austrians were generally concerned that money should have a neutral effect on economic activity. They were never against increases in the monetary supply. I would also suggest that you look into the background of some of the founders of the Austrian school. You might not like everything you find.

 

Thanks Cloud. Great clarification. I was not under the impression that Austrians were against increase in monetary supply however. I am not a big fan of Mises, a little too anarchistic for my tastes even as a Libertarian. I was merely bringing this up so that people can understand that inflation can mean different things in different contexts, and I think you have done us all a service in that regard.

 

I forget the place I heard it now...but I heard for last year (2011) we had real inflation (food) of an average of 9%
still think anyone that bough silver back in 2010 at all is still well ahead of the inflation we've had...course I'm assuming they paid spot prices or below....(under $20 basically)

 

Ron Paul is the one who said real inflation was 9% when he held up the silver coin to Bernanke, and I think he's looking at ShadowStats.

While silver is ahead of inflation, the price does not immediately reflect inflation when it happens. There is a delayed effect so it's not so cut and dry to just compare dates.

 

Just stumbled across an enlightening read about the insights and pitfalls of Mises views relating to the gold standard and inflation. Direct link to PDF so you don't have to put up with the nuances of the site hosting it.

http://www.zerohedge.com/sites/defa...imageroot/2012/02/TheGoldProblemReviseted.pdf

 

one question I got... why it it that some people on here choose to quote themselves and seem to basically have a conversation with themselves?

 

Antal Fekete probably understands more about how the gold standard really worked in practice than any other living economist. This is almost lost and forbidden knowledge at this point. Most people think they understand what "gold standard" means and how the economy would operate if gold was money again. But read a lot of Fekete, and your eyes will be opened to how and why it really worked.

 

OK since you asked. .... Why don't you send them a direct message and ask them if you are really curious? Otherwise, I think it is better to focus on the topic rather than attempts to discredit other members of this forum.

 

are you kidding me? asking a simple question is seen as an attack?
that's about the same as when fox news would ask the white house something and then get hit over the head cause the white house didn't want to answer and would deflect saying it's all fox news bad mouthing...
why are we doing QE?
why stop 1/2 the drilling that past administration allowed?
is algae really viable this year to combat high gas prices now?
such questions are demonized...unsure how asking a question is really a discredit...unless a person's record itself is discrediting and the question only shines light on it....

 

^No, I'm not kidding and you did ask. Talking about other formers is a waste of time and IMO, harmful to the forum, and absolutely does not lead to anything useful. A post to discredit someone is quite different than one that is off-topic. Either contact them direct or send a message to the operators of this forum if you think they are breaking rules. It's not really a hard concept.