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Valyooo (33.93)

A key point of fractional reserve banking



January 24, 2011 – Comments (35)

When the economy is expanding, more people take out loans, which increases bank credit, which expands the money supply,  When loans are paid back, there is less bank credit outstanding, and the money supply shinks.

Economic growth DOES CAUSE INFLATION.  Economic slowdown DOES CAUSE deflation. 

IT DOES NOT MATTER WHETHER OR NOT YOU LIKE THE SYSTEM.  It is what it is.  If I am wrong correct me.  I like Peter Schiff and agree a lot with what he says, but we are not currently on a gold standard, so to say that economic growth causes deflation is completely incorrect...even if he wishes it were so.  I here this every single day and it is so obviously wrong to me.  The system is what the system is....ideals will not make you correct.

Please correct me if I am wrong, because that would clarify things.

35 Comments – Post Your Own

#1) On January 24, 2011 at 9:59 PM, whereaminow (< 20) wrote:

Economic growth DOES CAUSE INFLATION. 

Define inflation. 

Economic slowdown DOES CAUSE deflation. 

Define deflation.

David in Qatar  

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#2) On January 24, 2011 at 10:02 PM, Valyooo (33.93) wrote:

Inflation- a general and progressive increase in prices

Deflation-  a decrease in the general price level of goods


Keep in mind I am keeping any personal opinion of FRB out of this as I don't really have one, I am just stating what I observe to be facts...we had deflation in 08 when credit froze

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#3) On January 24, 2011 at 10:14 PM, whereaminow (< 20) wrote:

Economic growth DOES CAUSE (price) INFLATION.

No. Economic growth is an increase in the output of (hopefully) useful goods. It does not require nor cause an increase in price inflation. Even under FRB. If you don't have someone turning the spigot to high (central bank/gov bank), then you will likely have output increasing faster than money entering the economy, Hence, prices will fall.

Economic slowdown DOES CAUSE (price) deflation.

Not true either empirically or theoretically. There is no link between price deflation and downturns. About half of worldwide downturns o\ also have price deflation while the other half do not. The myth persists however. Shame.

David in Qatar 

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#4) On January 24, 2011 at 10:51 PM, Valyooo (33.93) wrote:

It is completely true theoreically, and as I just showed, empirically.  Our economy has been best in times of low inflation (but inflation nonetheless).  If there are more expansions there are more loans which creates an increase in the real money supply....considering that all of the people on caps that say that money expansion is going to cause silver to go to funjibillion dollars an ounce, I would think this would not be such a hard concept to grasp.

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#5) On January 24, 2011 at 10:54 PM, Valyooo (33.93) wrote:

Read Fischer's part...and don't try to discredit him by throwing a bunch of Miser links at it.

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#6) On January 24, 2011 at 11:01 PM, Valyooo (33.93) wrote:

Also that link talks about a deflationary boom in China...what about the inflationary boom occuring now?

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#7) On January 25, 2011 at 3:37 AM, awallejr (39.10) wrote:

Well your biggest mistake is liking Schiff ;p  A man who sponsored his jailed father's anti-tax paying book.  A man who is a classic example that a broken clock is right twice a day.  A man who was arguing how we should let the whole economy collapse back in 2008 and do nothing.  A man who said put your money in emerging markets right at its height.  And now a man who is arguing, for lack of anything else, the age old argument of "anti-inflationism."

I wish people would stop mixing inflation/deflation concepts with supply/demand ones.  You can have decreasing prices during an expanding economy because you have increased supply meeting or exceeding that demand. But since commodities, for example, are pretty much finite at the moment (barring any serious mining on the Moon or Mars), while demand has been growing world wide, guess what is going to happen? Increased prices.  And it will have little to do with currency causation.


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#8) On January 25, 2011 at 9:38 AM, ChrisGraley (28.69) wrote:

I see a lot of mixed up things that do not have a cause and effect relationship being presented like they do.

Economic growth by itself should cause price deflation if the amount of money in the system is stable. This is basic logic. If we produce more goods and have the same amount of money, our money is able to buy more goods.

If I'm a bank and you repay the money that I created to loan you, there has not been any money taken out of the system. I still have it and in an FRB system, you have actually given me the ability to create even more money to loan out to the next poor slob. Now if I decide not to loan it out, the money would be taken out of the system because of credit deflation.

Credit deflation can only occur after credit inflation. If you never had the latter, you would never have the former. Why would I not lend money out? Because I don't think you can or will pay it back. You are taking on more risk than you can handle. Why would you take on more risk than you can handle? Well it's easy to do in the good times with easy credit. Money gets pumped into the system so fast that everything goes up. Everyone leverages to the hilt trying to make money as fast as possible before the bubble bursts. But it will burst.

awallejr is right about the diminishing supply of silver, but silver also responds to money supply side inflation as well. Most people advocating silver (including myself) expect credit deflation in the near term, followed by an increase in the money supply to try and print our way out of it. (QE3, QE4, ect...)

That's why silver will be worth a funjibillion dollars an ounce.

Did that answer your questions?


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#9) On January 25, 2011 at 2:54 PM, Valyooo (33.93) wrote:

Yes, thank you Chris...By the way, I am long silver...slw, aem and gprlf make up about 28% of my portfolio

I obviously understand the basic more money chasing fewer things causes deflation.  However, credit deflation does happen when things are slowing down...which is why FRB creates bigger booms and bigger busts.  It seems to be a trend that expansionary times cause inflation, not saying it has ot be absolute

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#10) On January 25, 2011 at 3:00 PM, whereaminow (< 20) wrote:


Did you read the Miser link (sic). It's about a work by Atkeson and Kehoe. Two non Misers right up your mainstream alley.


Peter Schiff's defense of his father is heroic. How dare a man not give the fruits of his labor over to you at gunpoint =D?

David in Qatar

(p.s I can only take so much ignorance. Be a smart ass on top of it and you're gonna get a smart ass in return.) 

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#11) On January 25, 2011 at 3:42 PM, ChrisGraley (28.69) wrote:

Expansionary economies don't cause the booms and busts, just expansionary money supply and expansionary credit.

Easy money, creates abnormal speculation, creates the deflationary bust.

An economy that isn't prodded with easy money or easy credit is a sound economy and shouldn't experience wild booms and busts.

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#12) On January 25, 2011 at 4:22 PM, Valyooo (33.93) wrote:


Please do not comment on my blogs if you are going to be a sarcastic dick all of the time. I don't appreciate you telling me I have mainstream views, when I don't at all...when you start out by saying its "a shame" that I have a view different than yours (hey, atleast I tend to back my ideas up) then don't get mad when I am a smart ass right back at you.   There is absolutely no reason at all for the way you talk down to me on a consistent basis.  I can only take so much of your ignorance as well.

I never said expansionary economies cause the booms and busts, I am saying that expansionary money supplies magnify both.  I am well aware that money expansion if the cause of most economic busts, but my point is that it is the deflationary portion of it which causes the pain which is caused by a credit freeze or dried up loans...that is not to say it doesnt all start out as being due to the inflation.

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#13) On January 25, 2011 at 4:24 PM, Valyooo (33.93) wrote:

Also, it does not make much sense that Schiff defends his anti-tax father meanwhile he ran for U.S. can you want to be a part of the government if you are anti-establishment?

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#14) On January 25, 2011 at 5:33 PM, TheDumbMoney (78.85) wrote:

@Chris:  "An economy that isn't prodded with easy money or easy credit is a sound economy and shouldn't experience wild booms and busts."   Long before fiat money was invented, bankers holding gold leveraged their holdings creating factional reserve systems informally by lending more than was backed by their gold, thus "easing" credit, and many of them lent too freely in the absence of regulation, thus causing too-easy credit and ultimately, crises, and bank runs.  In the era before the federal reserve and/or looking much, much further back, before financial regulation, there have been bank runs and financial crises.  There have been tupip crazes and East Sea China crazes, etc., etc., etc.  In this country, we have had major financial crises while under our current standard, and under a pm standard.  Reinhart and Rogoff wrote this seminal article, which was ultimately turned into a best-selling and oft-quoted book, in which they looked back at eight centuries of financial crises.  So, I will choose to assume you are not assuming the fed or our current system of monetary supply is the problem here.   One thing and one thing alone causes and will continue to cause economic crises of all kinds:  human greed, emotion, and fecklessness.  This has persisted across all eras, it has persisted across all monetary systems, and it will continue to persist.  Easy money and easy credit is nothing more than a sign of a top. 

Deflation vs. Inflation:  I suggest we all review the equation of exchange.   Also, I disagree with his conclusions, but John Hussman has a nice piece relating to this out today, see here.  Inflation and deflation go beyond any formula, in my view.  They are all about expectations.  Today, do we expect things to cost more or less?  In August 2010 we were starting to expect less.  After QE2, no, except for housing, which we do expect to cost less.  Formulae aside, inflation leads to more inflation, deflation leads to more deflation, absent some intervention or crisis, in my view.   One thing that David in Quatar is missing in his oh-so-clear worldview (would that mine could be so clear and certain!) is the bedrock economic principle that if firms expect prices to decline in the future, they will invest and produce less today to make sales tomorrow, thus leading to further declines in price and further under-investment.  Thus, sustained economic growth does typically require mild inflation.  The date I think backs that up. 

Personally, I would say neither that inflation causes economic growth, nor that economic growth causes inflation.  I would say they are intensely correlated, and somewhat cause each other.  Growth can occur duing periods of deflation, but to my knowledge studies have shown it is extremely uncommon.  As for deflation, I would agree with the wikipedia post on it, multiple things can cause it:  money supply deflation, credit deflation.  But I generally think again in terms of correlation, not causation:  the shock of a crisis and a major contraction of credit, for example, will (as I understand it) cause BOTH deflation and economic slowdown.  THough it's a bit of a chicken and egg thing, and it's not abosolute  Something as simple as devaluing the currency (as Iceland, with an independent currency, has done recently) can allow sufficient price adjustments to stave off inflation, whereas Spain cannot devalue its own currency, so it more likely faces deflation.

Returning to the exchange equation, the whole point of our current system is that the Fed can vary M in response to drops or increases in Q.  (Some BRICS are currently trying to lower M in part in response to a huge increase in Q, by raising interest rates.)  While our current system does not promise and does not deliver long term price stability, it does generaly deliver short term price stability.  Contrast 1943 -- present with 1879-1913, when the U.S. was on the gold standard, a period of time during which there were truly massive, massive shifts in short-term price, volatility, more than seventeen times the coefficient of what we have seen in the last sixty years.  If we had not had QE, and if we had not had QEII, we would have seen massive deflation during this period of deleveraging deflation.  But we did get the QEs.  Now the question on everyone's minds is:  was there enough QE to prevent deflation as deleveraging continues, and second, can the fed decrease the money supply sufficiently quickly to conteract inflation if and when the exchange equation dictates that inflation will go up.  I suspect Chris thinks both that QE was insufficient in the short-term, and also that the Fed will not know when to take away the punch bowl, though I'm putting words in his mouth.  What this argument boils down to, stripping away the jargon and the math, is ultimately a non-mathematical question:  do you trust the Fed?  Since most people do not, and I suspect Chris does not, you get his answers above.  I on the other hand am a lunatic who actually thinks the Fed has performed spectacularly since about mid/late 2008, who thinks that many, many, many other things besides Fed policy led to that policy, and who has a certain amount of faith that they will be able to make the necessary adjustments in time.  The ten-year TIPs market agrees, which is why it forecasts mild inflation over the next ten years.

Anyway, I see I veered WAY off topic.  Just typing away over here.

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#15) On January 25, 2011 at 5:37 PM, TheDumbMoney (78.85) wrote:

"who thinks that many, many, many other things besides Fed policy led to that policy,"  should say "led to that crisis".   I also used inflation in the sentence about Iceland, when I should have said deflation, and there are many other typos as well.

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#16) On January 25, 2011 at 5:37 PM, Valyooo (33.93) wrote:

Excellent post dumberthanafool!

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#17) On January 25, 2011 at 9:02 PM, ChrisGraley (28.69) wrote:

@ Valyooo, excuse me for not understanding your point. Too many people confuse easing the money supply with economic growth and I thought that was where you were headed as well.

If your question is simply "deflation or inflation?", that is the million dollar question. My personal opinion again is a deflationary dip followed by more inflation. If your more specific question is "how should that affect silver?", my answer for you would be different than the answer is for myself. Obviously you understand what happens in inflation. There is a difference though between our 2 investment choices. You hold miners and I hold physical silver. (I do hold a little mining stock) I hold physical silver because in inflationary times, I don't have to worry about mining costs or news coming out about any specific company. In inflation, you can definately make more money than me, especially if the news is a new mine, but as long as I'm right about inflation, I know I'm certain to make money. If there is an oil embargo at the same time that the inflation hits, you could lose money on a silver stock even during inflation. I won't necessarily lose money in deflation either. Silver is still a storage of wealth. I may have to hold it longer, but if the deflation is severe, I would feel better about having silver in my pocket than money stored at a bank. Banks fail in deflationary periods and so do stocks.

Again I hope that answers the question but if it doesn't please restate and I'll give it another attempt.


First, thank you for presenting a differing opinion in a non-offending way. Second, it sounds like we agree on a lot.

Ok, I totally agree that fiat gold (fiat silver was much worse though) and any other policy that creates easy money or easy credit being just as bad as our current system. It doesn't really matter how the easy money or credit gets there, it does the same damage. As far as the paper that you cited, I think that it reinforces the same point. I also agree with the conclusion in the second paper that current spending will lead to long term inflation.

As far as your third paragraph, I would agree to a point, but I would concede that inflation does lead to a virtual economic growth, but that growth disappears with the inflation of the monetary supply though. While I would agree that Iceland debased their currency to stave off deflation, they  also let banks fail rather than prop them up like Ireland did. While their current pain is more intense, they won't suffer for decades for it like Ireland will. Iceland will still pay for the debasement of their currency, but Ireland will have productivity of future generations paying for those propped banks.

Last, as far as my opinions about the Fed go...

Do I think that current Fed policy caused the damage that we see now? No, I think that current Fed policy has caused much worse damage down the line. The pain we feel now is from Fed policy decades ago.

Do I think that QE1 was too small? No, I never wanted QE1 to begin with. QE1 just kicks the can down the road and makes my children slaves to maintaining my lifestyle long after I die.

Do I think that the Fed won't know when to take away the punchbowl? Well, yes and no. They might raise interest rates at the right time and therefore slow the rate of inflation, but they absolutely will not actually take money out of the system. The whole point of the QE's is to avoid paying the price for the excesses of the past. Inflation is still inevitable until we are willing to accept deflation. The cumulative deflationary response to our excesses over the decades will be catostrophic.

As far of my opinion on whether or not I trust the Fed, I don't trust them any more than I would anyone else that distorts the money supply to feign prosperity. While short term, I get the advantage of maintaining my lifestyle, long term my kids pay the price.

While everyone else ate a very nice meal and left the table, my kids are presented with the entire bill.

Did the Fed perform spectacularly? I guess it depends if you the one getting the free meal or the one that's paying for everyone else.

I hope this doesn't come off as agressive on my part. Your post was more than cordial. As you can see it's a big soft spot for me. I'm betting that you don't have kids.

Anyway a well thought out post on your part and I hope I gave a worthy response.


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#18) On January 25, 2011 at 9:20 PM, awallejr (39.10) wrote:


Peter Schiff's defense of his father is heroic

Nah what would have been "heroic" was if Peter Schiff actually FOLLOWED his father's advice which Peter Schiff endorsed, namely not paying taxes and advising others to do the same.  In that case they could have shared a jail cell together.

I don't really want to derail this thread further since there are plenty of "Schiff" threads by Kdakota.

As for the "flations" I am more concerned about staglation because I see the pressure of supply/demand  on commodities (input costs) coming from emerging markets without attendant corresponding wage growth here enabling the average American to afford paying for those increasing costs.







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#19) On January 25, 2011 at 10:22 PM, whereaminow (< 20) wrote:


In that case they could have shared a jail cell together.

And since that would have been heroic, you would have then defended them as well, right?

Well, I hope you sleep easier with Irwin Schiff behind bars. He was a real threat to society. Taxation is slavery.

I am more concerned about staglation

And where did you get that idea? LOL


That's unfortunate you were offended. I tried to be helpful and you scoffed at it. You're not entitled to my friendship. If you respond favorably, I will respond in kind. The only thing I can do is point the way. Unless you indicate otherwise, this will be my last post on your blogs.

David in Qatar

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#20) On January 25, 2011 at 11:05 PM, Valyooo (33.93) wrote:


I have no problem with you, and I think you are a very good writer, and knowledgable in some fields I am very interested in, mainly anarchy.  I just feel that often when I reply to something you say (which I say purely to invoke conversation so that I can learn more) you just kind of dismiss me as an idiot, and don't give me a response, but rather just call me ignorant or some such.  If it was all just a misunderstanding, let us start anew, and I would like for you to continue contributing to my blogs.


I totally understand why you thought I was headed that way...95% of people would be thinking that way, which is why I tried as hard as possible to make it clear that was not my line of thought.  I am glad you now see where I am coming from. However, in 08 when we had deflation, didn't silver have like a 70% correction (I thought sinchi said that)?  So wouldn't deflation be bad for silver?

Also, why do you expect deflation before inflation?  Once employment picks up velocity will increase and send inflation flying...also the PPI is up so the CPI will have to follow...I see no catalysts for inflation, but I would love to hear your take.

As for the miners, to be honest I don't know much about GPRLF, I just like the price actiona nd the appraise of people I respect.  I cannot help but to use history to show me that equities > other investment vehicles, and I am by nature a trader, so I need the is a gift and a curse.

Why is $25 your rock bottom support?

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#21) On January 25, 2011 at 11:51 PM, awallejr (39.10) wrote:



In that case they could have shared a jail cell together.

And since that would have been heroic, you would have then defended them as well, right?

Well, I hope you sleep easier with Irwin Schiff behind bars. He was a real threat to society. Taxation is slavery.

I am more concerned about stagflation (typo corrected)

And where did you get that idea? LOL"

Will always defend their right to speak, and would have saluted them both for suffering the consequneces of their actions (since it is basically a victimless crime). But only Irwin gets that since Peter was and is nothing but talk. But the idea of stagflation concern comes from having lived through it during the 1970s.

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#24) On January 26, 2011 at 12:27 AM, Valyooo (33.93) wrote:

I know this is slightly off topic but I think I am allowed to hijack my own thread.  Without FRB, how would investing work?  Would everything be a zero sum game?  If you invested in a bunch of companies and they were sucessful, you would get deflation, which is good for your purchasing power, but you would come out with less money, so people would hoard cash and there would be no investments, right?  In Schiff's book, he writes using fish instead of money.  As more people fish, there are more fish.  So if there is a lot more productivity, but the money supply does not grow, this makes no sense, because if we used trade rather than money, the "money supply" (which in this case would be real things) would why not grow the money supply?  I think in this case (2011) the problem is the rate at which money supply grows vs the rate of productivity growth, not the entire theory behind expanding the money supply...what are all of your thoughts?

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#25) On January 26, 2011 at 12:29 AM, ChrisGraley (28.69) wrote:

awallejr, I think we are already in stagflation. Input costs are rising while unemployment is still high.

David, I've got one of those too!

valyoo, Yes silver will suffer in the deflationary drop. (Not if JP Morgan and HSBC take advantage of the movement and close all their shorts though) These numbers are off the top of my head, but I believe the move was more like a 50% drop. It was around $18 in 10/08 and dropped to around $9 by 12/08. It was back up to $18 by 12/09. Which would mean a 0% return over a 14 month period, but that would be way better than having it in say Lehman Brother Stock over the same timeframe.

As far as why I expect another deflationary drop, either a country in Europe will implode or the China real estate bubble will burst or some other unforseen event in this house of cards will cause panic and another drop. We'll print our way out of it and since all this printed money didn't create jobs before, I think we'll actually spend massive amounts of money on infrastructure this go round and you hit the nail on the head as far as job growth being an inflationary trigger.

There's nothing wrong with miners and I think that you may very well do better than I do with physical silver.

As far as a $25 bottom on silver, we aren't producing it as fast as we are cosuming it and it has been manipulated for way too long. Public pressure to stop that manipulation is gaining momentum and we're never going to stop printing money. The gold/silver ratio alone would suggest $500 gold when silver is at $25.

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#26) On January 26, 2011 at 12:34 AM, ChrisGraley (28.69) wrote:

On your post in #24, I'll have to defer till tomorrow as it requires a long answer and I must go to sleep, but perhaps someone else can chime in.



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#27) On January 26, 2011 at 12:43 AM, awallejr (39.10) wrote:

awallejr, I think we are already in stagflation. Input costs are rising while unemployment is still high.

Yup, you are probably right, but I am bascially in denial.  I read where the consensus is that we would need over 5% GDP growth  for years to have any major impact on unemployment, although I still think retiring boomers opening up positions might offset that number.  Time will tell I suppose.

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#28) On January 26, 2011 at 7:56 PM, ChrisGraley (28.69) wrote:

valyooo are you still following this post?

I'd like to post a response to #24, but it will be very long and I'd hate to post it if you aren't looking at this post anymore.

Chime in and I'll post a response.


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#29) On January 26, 2011 at 9:58 PM, Valyooo (33.93) wrote:

I'm all ears

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#30) On January 27, 2011 at 9:07 AM, ChrisGraley (28.69) wrote:


So here's how it would work.

First off, for a business, input costs would be lower so businesses would lower their prices. The demand curve would stay the same but there would be more demand at the lower price point. The business would sell more product at a lower price.

Wages would initially remain constant because employees would be happy with that because they still have higher purchasing power. Wages may eventually increase as competition for workers increases in a vibrant economy, but there would be room for increased wages with the lower input costs. As long as the money supply stays constant, wages cannot get out of control.

Profits for companies would actually increase because even though they are selling products at a lower price, they are selling proportionally more products. Input costs would be lower, but margins would remain constant.

People would avoid credit and would actually want to save money. Paying interest on anything that will be cheaper tomorrow is a losing proposition. Savers would flood the market with cash through investments. Stocks would sell at higher P/E values than they do now.

With more money in the market, more new companies would start and the economy would grow further. We should be close to full employment. People would retire earlier, since people on a fixed income would get an increase in purchasing power every year.

Take a look at the equation for the future value of money.

Now imagine that instead of the puchasing power of that money being lower, the purchasing power is higher.

Investing during deflationary growth would be fantastic.

Also there wouldn't be any leverage in the market so speculation would be down. Growth in the market would be slow and steady with less fluctuation.

This wasn't as long as I thought it would wind up to be, but I'm sure that you have questions so fire away.



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#31) On January 27, 2011 at 3:21 PM, Valyooo (33.93) wrote:

No I understand all of that stuff...but what I mean is that if you bought an index fund, say the spy, and productivity in the world greatly increased, and there was deflation, things in general would be a lot cheaper...but the actual nominal price of the index fund would drop..which would make you want to hoard cash instead of investing.  Investing in individual stocks would make sense because some would lose and some would win.  But if the total productivity of the world increases, and the index fund decreases, there is no incentive to invest.  How would lending work, to start new businesses? In schiffs book he used fish, and people repaid the fish they borrowed with the new fish they caught...but if there was not an increase in money to match the increase in productivity, that would not work.    I understand the future value of money, and I understand how people would avoid credit and actually save...I just cant see the reason for people to buy equities or do anything other than start their own business and hoard cash, which would lead to a lot slower growth than lending for interest.

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#32) On January 27, 2011 at 5:46 PM, ChrisGraley (28.69) wrote:

OK, first of all, the SPY would not go down, it would go up. The companies in the SPY would be making more money and not less and given the relative safety of the SPY vs other companies, they would go up in a higher proportion. Boring would be popular. Lending would still work the same as it has, but it wouldn't be very popular and most people would save for what they wanted rather than borrow. Saving = invesment. It's not an alternative. Hoarding cash at zero percent at a bank that knows your money will be able to buy more later is not as good as making a few percent in the stock market.

Does that all make sense?


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#33) On January 28, 2011 at 11:03 AM, Valyooo (33.93) wrote:

But in aggregate, wouldnt one company only be able to succeed if others fail?  Zero sum if money does not expand...if one person has more money than they used to that means somebody else has less money.  If money supply expands, everybody has more money when everybody has more stuff...think about it in bartering terms.  If people work a lot more and produce a lot more stuff, they have more "money", since the "money" is "stuff" the money supply expands.  But if it never expands, then that means one person can only gain money by somebody else forfeiting...maybe I am not explaining what I mean, sorry to confuse you.

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#34) On January 28, 2011 at 6:50 PM, ChrisGraley (28.69) wrote:

Well yes, money that I gain is money that someone else doesn't gain, but the value of that money is always increasing. So in essence you or I can have a better lifestyle with less money.

What is really cool is how a charitable trust would work in a scenario like this. You can continually help more and more people every year with the same initial investment.

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#35) On January 29, 2011 at 12:49 PM, Valyooo (33.93) wrote:

Yeah I totally see the benefit of th value increasins, but what I am saying is that it would not be as beneficial to investing, which would slow growth even though it would create stabilitiy.

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