In an accounting sense, sure.

Nonsense. Banks have a strong profit incentive to fight inflation, not to cause it. They also work to redistribute excess money to people who value it the most, so I'm not sure what you mean by "usurped free trade" (unless by 'usurped' you mean 'participate in'.)

Yeaaah, this is why you don't understand economics. You aren't making profit. The cost of a $1 million mattress is $1 million in stuff.

I never understood this, if the conspiracy exists, and has start 3 major wars, why would they have any qualms killing the people who expose it?
Truthers too, it's the one thing they can't explain.

I don't understand what would cause you to doubt this initial assumption. It seems to me those quotations are pretty obviously meant to describe the Soviet Union and its sympathizers.

Conspiracy is a crime, sir.

But only an inchoate offense. It requires an agreement to break some other law.

every time i see this thread title, i can't help but want to post this



however, i'm in a youtube linking mood tonight and there aren't any good copies of this on there, so Halo3 version instead.

There are a lot more variables than that. Growth rate of technological progress has a lot more to say about accumulating wealth than savings. Most theories will say that a high savings rate alone does not accumulate wealth because at a certain point you will reach an equilibrium in which capital accumulation growth and output growth (note: growth, not levels) reaches zero. It's the efficiency and technological progress that makes up for this. You are also assuming that savings will automatically lead to good capital investment.

And re: the bank and inflation, I'm not sure how making your currency worth less is good for those holding dollar assets. Probably because it isn't. The only incentive one might have for inflation is to increase the purchasing power of people abroad by depreciating your currency and boosting your exports, but that is hardly related to the banks, and often times the value effect of imports when measured in terms of domestic exports will even dominate the volume effect of increased exports, so even then it is iffy. There aren't really that many motives for inflation, especially when you analyze a country without trade or exchange rates.

Every sheep for the shearing waiting around non-plussed
Trading branding irons for brand-name cuts
We were born in labor, baptized in dust
Given life anew as a living trust
With every hair numbered and cross-referenced
For each soul they claim to save, they have added interest
With a price on your head, what you think matters not
Every credit card statement, every lie you've bought
Rates our exchanged faith for the next fiat
On the blotter paper, the blood don't clot
It just bleeds you dry and then leaves you to rot
In a dead end job till at last you drop
Into this old noose, with the rope drawn taut
Left with your hands bound so they'll never be caught

Not bad but your cadence & schemes need work Vin

Also apparently I talked to a guy who believes the moon landing was a hoax because "light can't travel in a vacuum"

Whaaaat.

You assume too much.

I used to work w/ a guy that thinks that the moon landing was a hoax. I used to tease him about it all the time. He'd fire up his computer in the morning & his wallpaper would be a random moon landing photo. A friend & I would even leave him voicemails doing Aldrin & Armstrong reenactments. He got so mad about it that he would stop speaking to me for days sometimes. I was actually "coached" by my supervisor over the entire ordeal at least twice. Those were good times.

The Moon landing was a hoax silly, why goto the moon? We went to Mars!

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The moon landing was filmed at a soundstage on Mars because the real landing suffered complications that resulted in the death of the real Elvis.

Yep, thats why our Star doesn't give us light, to allow photosynthesis or daytime to be possible..oh...wait..no

Who was it that had a coworker who didn't believe in molecules because "how could anything be so small you can't see it?"

Banks have no choice but to cause inflation, since it is a byproduct of fractional reserve lending. And yes, it is a strong profit incentive to be able to leverage the hell out of all their loans without taking out loans themselves.



Credit, not money. Y'know.. it's debt. (Just like money, but in a more immediately obvious way.)

The cause of inflation is hotly-debated by economists. Freelancer, you are incredibly unlikely to be correct. The total quantity of money is the most widely accepted predictor of inflation. In most models, the increased availability of money balances out with prices and wages.

It's not too bad though. I used to believe this too, back before I knew anything about economics.

Debt is good and free market economies do not work correctly without it. If you don't like it you can suck it up, I guess? Good luck saving up for a house while you're paying rent.

Lol? Increase the money supply -> money is worth less. Yeah, it really is that simple.



Yeah.

Yeah. Prices increase to account for everyone suddenly being rich. That's rather what inflation is. Problem is, unless your savings are in hard assets, you get boned.

Somewhat related to the conspiracy talk:
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/22/AR2010052201586.html

Obama talks about a "New International Order"

Shouldn't he know better than to say stuff like that?

One may or may not disagree w/ the Bush doctrine but at least Obama actually knows what it is.

Correlation does not imply causation. The quantity of extant money is a good predictor of inflation because governments have an awful habit of printing more money when the economy slows down.

Are you conceding the point, or are you inattentive?

Prices increase to account for greater wealth and greater costs of production. Prices in a competitive market don't increase unless they're being pushed from both sides. This is high school econ ****, Freelancer.

Real Economists believe one of the causes of inflation is the transfer of productive savings into non-productive "hard assets" like gold bars.

Nothing caused me to doubt it, I'm just confused that I can't find anyone else refuting it, since it is so often quoted by :tinfoil:s.

And I always laugh when people freak out over politicians using phrases like 'new world ____'. It always means "GLOBAL ENSLAVEMENT AND THE RFID MARK OF THE BEAST PRAISE JESUS' to them, rather than the 'stable world community' I think they are really referring to.

The only real conspiracies involve Finland.

Here's the deal, Jon:

Inflation is conservatively at 2-3%, and closer to 9% for things that matter economically to me the most (college). A savings account gets me maybe 0.5% interest these days? It's costing me up the ass to operate a bank account. I'm not going to speculate, because that's retarded for someone in my position. What the hell am I supposed to do, if not put my savings into something that retains its value?

first, switch banks and get a free checking account. dont rely on the bank as your source of earned interest on your savings. by all means do invest some in comodities such as gold, it is a good investment as it will almost certainly never be worth 0. however dont put all your money in gold. buying a ton of gold at 1200$ an oz, and then having your entire savings drop to 1100$ an oz is never fun. if you want to rely on interest for your savings i would suggest buying government bonds, federal not state if at all possible. or play the stock market, but play smart.

seriously though, easiest thing to do is find a bank that is willing to give a free checking AND savings account with a reasonable minimum balance (usually around 1000$) and just slowly save up money. yeah its difficult, and your not going to save up big sums of money in a small period of time, but it can be done, even on a tight budget.

Freelancer, that is the point of savings account. Interest Rates are about risk, not about just giving away money. The whole point of interest rates is to determine investment and savings and your personal demand for real money holdings. Demand for money holdings is clearly a function of interest rates and disposable income. If you received a huge amount of interest payments back from a savings account, then EVERYONE would put their money in one. There is 0 risk from a savings account, so you will get NEAR zero interest payments back. There is a whole liquidity factor to money holdings that you are forgetting in the economy.

Put money in silver (a lot more affordable than gold now)? Invest your money in safer mutual funds? Invest wisely in stocks that you believe won't be affected by many exogenous shocks? Buy bonds, the government always needs money (you can pretty much count on that) and t-bills are relatively stable. With the government continuing to spend a gajillion dollars, t-bill yields should have a normal increasing function with age. If you believe that the economy is in a rough period and will continue in it for some time there is a good opportunity to buy bonds, but with growth projected it might be a bit too late. CDs are much like savings account but they will offer higher return with a fixed interest rate the longer you go. I even think the 6 month ones at least offer 1% right now which is more than your savings account. Hell with the Euro zone seemingly about to implode as well as the UK budget deficit climbing higher and higher, play some arbitrage in the foreign exchange market. It's high risk but high reward if you have some knowledge about the economies around the world.

Is there an advantage to going w/ a CD instead of a high interest checking account (other than having it inaccessible)? My high interest checking account earns 3.01% APY w/ a $25k cap (1.01% APY after that). The same bank (credit union) only offers 1.2% APY on money market accounts, 0.26% APY on savings accounts & 1.15%-3% APY on CDs.

"The greatest shortcoming of the human race is our inability to understand the exponential function."

Do you have a point, or...?

Do I have to spell out everything to you people.

9% inflation on what I'd be using the money for.

Negligable interest.

Means my bank account will be worth almost half of what it is today by the time I graduate

His advice is terrible.

Anyway, **** that, it's a terrible investment no matter how you look at it.

You should attempt to make an argument of SOME kind, rather than just ambiguous quotations and "yeah."

Freelancer is confusing "savings account" with "investing," which is an understandable stupid mistake. Bucky explained it perfectly a few posts above.

exp(x) = lim n->infinity of (1 + x/n)^n ?

It would also help if he stayed on point. At first he was *****ing about how banks cause inflation, then he started complaining about tuition and now he's whining about a no-risk investment having a no-gain interest rate?

Freelancer's whining is just retarded. The average person with a bachelor's degree makes $20,000 more a year than a high school graduate. They could charge $250,000 a year and it'd still be worth it.

I think his basic complaint is that if he keeps his money in a jar in his back yard, it loses worth due to inflation, and if he puts it in a bank it gains interest, but it still loses worth because the interest does not match or exceed inflation. I guess?

If Freelancer really cared about inflation, he'd go on a killing spree. The only surefire way of stopping inflation is to thin the herd.

You get a cookie. The rest of you are more retarded than you think you are. But probably only a little bit.