Odd post about inflation

[Almo]

http://science.slashdot.org/comment...hold=0&commentsort=0&mode=thread&cid=19675295

Hmm. This sounds rather glib to me. I'm not an economist, but this sounds like the kind of thing that might sound ok, but forgets some basics.

 

[drkitten]

http://science.slashdot.org/comment...hold=0&commentsort=0&mode=thread&cid=19675295

Hmm. This sounds rather glib to me. I'm not an economist, but this sounds like the kind of thing that might sound ok, but forgets some basics.

The first two paragraphs are correct. The rest are the ravings of a deranged and undereducated conspiracy theorist.

 

[PixyMisa]

Let's see. The poster asserts that money is the same as wealth, that wealth is zero-sum, that fiat currency has to be paid for (I'm not even sure what that means), and that somehow all this sprang into existence when Nixon broke with the Bretton Woods agreement in 1971. (If you search for August 15 1971, you'll find a lot of nonsense of this sort.)

I'm no economist either, but what I do know of it points to the same conclusion as drkitten. (And more generally, Slashdot is one of the last places on the net to pick up economic theory.)

 

[Mid]

Have to agree with everyone else that it starts off reasonably ok and then after the second paragraph goes down hill very quickly.

 

[Almo]

The simplistic generalization from a percentage sequence to banks owning everything sort of did it for me. Good point about wealth and zero-sum. Hadn't thought of that angle on his post.

 

[Beerina]

While what the article says is largely true, he misses the point that, even if money were based on gold, and fixed to it, you still wouldn't be able to pay the US national debt. The money supply, as a value, cannot possibly pay for everything that exists simultaneously, of which the US national debt is just one fraction.

Yes, Nixon did have an issue when the debt grew larger than the value of the gold backing the money. At that point, the US could no longer back its debts using the gold, so it stopped that. Instead, it just backed it using the unique and legal power to tax.

And yes, the whole house of cards could collapse. But a gold backing wouldn't necessarily help that, as it would only help those with physical dollars in their hands. And, as Kuwait showed, just having gold backing your money is worthless if society completely collapses.