Jump to content

AceofKY

Members
  • Content Count

    300
  • Joined

  • Last visited

Everything posted by AceofKY

  1. Ok, I see HK is much more expensive, if I am doing the conversion properly at 7.8 HK dollars per US dollar. Let me give you a few comparables versus central Kentucky prices: Those cheap sardine homes in Frizzer's picture are built and sold brand new for around US$70 to $80 per square foot. A very nice home can be built brand new for US$120-140 (HK$936-1092) per square foot. The land may be more depending on where you are at and how much land you get. My firm (which I am leaving) designs schools which are built for US$140-180 per square foot (not including the land). I paid US$62.5 (HK$487.5) per square foot for my home and property. It is ~30 years old and not much, but we also have 5 acres of land (2.02 hectares) and a metal shop with concrete floor which is probably around 2000 square feet. Office space in the city of Lexington rents for around US$10psf per year. Undeveloped land goes for around US$500 to $2000 per acre after you get out ~10 miles from the city. Closer to the city it gets more expensive and can go up to US$20,000 per acre. So you can see why many people move away from the city...land is much more affordable. The funny thing is that this area of our state is one of the more expensive areas. Other states such as CA and Florida have much higher land and home prices. Obviously, our incomes here are lower than those who live in CA and Florida, and I suspect much lower than HK.
  2. LOL. I've seen some of those types of neighborhoods, but they are all being built on the edge of the City. Those pictures, in fact, are much more densely populated than our most urban areas except for right in the downtown Lexington area where there are a few high rise apartment buildings. Perhaps I'm a little insulated here in KY from what goes on in the major urban areas such as L.A. and New York. When I think of a suburb, I think of an area with larger houses and more land. The pictures you are showing are cheaply built homes packed in like sardines. That is NOT anyone's dream, much less the much heralded "American Dream." People only move to these types of neighborhoods as a "starter" home or if that's all they can afford and they need to escape the inner city area.
  3. Yes, I would vote against such a politician myself. Suburbanites would be hurt by such a measure, but it would also hurt everyone else in the economy and, like most taxes of this type, would probably hit the poor the hardest. Some states (such as CA, for example) do have much higher taxes and more stringent rules on emissions. They also have smog and pollution which we don't have to worry about in my area. They are furthermore full of beggars and homeless people because no one can afford to live there. It should be clear to everyone by now (after the whole ethanol fiasco) that our government doesn't have a clue with respect to energy policy. I have no intention to give them more of my income than is already required. My land will become a solar farm when the technology and economics justify it. That will not happen, however, if our government taxes my income away. My house is hardly luxurious, Frizzers. It is over 30 years old and not very well built. My wife wants a newer home, of course. One like those pictures that Bubb posted. We live, however, in the heart of the Kentucky "Bluegrass" - a very beautiful area that is considered the "horse capital of the world" since it is filled with Thoroughbred farms. The only mass transportation we have here is the school buses that take kids to school. I lived in the City (in mass housing/apartments) when I was attending the University. We had to keep our doors locked - even when we were home. Everyone lived right beside each other and yet didn't even know each other. It wasn't too bad - mainly because I was spending all of my time in class, in the library, or working. I didn't have kids at the time. That is the main thing, now that I think about it, that Dr. Bubb doesn't seem to address in his article (and it is an unselfish motive). Most people here want to move out of urban areas so they can raise their kids in a decent environment. The public city schools are a horrible place to send your children, here. Not to mention the fact that your kids can't play outside. You'd have to go to a park and watch them every single second. At my home in the country, we don't bother locking our doors - even if we go on vacation. There is something to be said for that kind of security when you have young 'uns, and it is not easy to put a value on. Yes, we burn a lot of gasoline out here. But our fuel and home utility bills are still less than our food bills. And, judging by the picture, I suspect my house payment, fuel bill, utility bill, and food bills combined wouldn't be enough to rent an apartment in Dr. B's lavish pad.
  4. I was in no way meaning to imply that the US enjoys a better standard of living then Europe. In fact, most of Europe is probably better off than my own state of Kentucky. What I WAS trying to imply is that Europe is in the same boat that we are in with respect to the possible unsustainability of culture - they just don't realize it. Simply because Europe uses less energy than the US does not make European society any more "sustainable" as there are many more factors that go into a culture than energy use. Many commentators have already written about the dying culture of Western Europe; I don't think I need to add to that here. Islam, Asia, and Latin America are the cultures on the move these days, and these folks won't think twice about the energy they use in swallowing Europe and North America. The energy use of the US is directly related to how cheap it is. As it gets more expensive, we will use less of it, find alternatives, and readjust our lifestyles accordingly as Bubb has written in his article. I agree with Bubb that it is very likely that we will enjoy a reduced standard of living in the coming years. I also agree with Malco that this is not a specifically American problem. I disagree that it is really all that important in the grand scheme of things, and I feel that we have better uses for public funds rather than demoing homes and building trains across millions of square miles of territory. Just as McMansions and surburban homes shouldn't be an end in themselves; neither should reducing energy use be an end in itself. I suppose you are referring to the invasion of Iraq when you are talking about our country's actions? Or were you referring to how your mother's country has been saved twice via our help and blood? The invasion of Iraq is/was a disaster. It is just another case of what happens when government gets too much power. I am looking forward to a depression if it wakes the US enough to scale back the welfare/warfare complex, reestablish a sound currency, and reevaluate our lifestyles.
  5. I disagree that the "Home-in-the-Suburbs" is the sum total of the American Dream. The suburban home is not an end in itself (which is what your article seems to say) - it is a means to what many of us feel is a better standard of living than is available in the urban environment (many American's don't feel this way at all). A better standard of living was certainly a big part of the American Dream. That is ok when you're coming from a position of poverty. Most of us now have a very good standard of living, however, so the desire to continue to increase that standard of living (via entertainment, electronic gadgets, bigger/better homes, etc) may no longer be morally justifiable. And it doesn't help that our government promotes this by holding interest rates artificially low. Europeans however, and most other cultures that I know of (except Islam, maybe), do not have a legitimate basis upon which they can stand to tell us that our energy usage and McMansion building is morally unjustifiable. They have already rejected the traditional understanding of reality that produces things such as "morals" and "shoulds" and "should nots" and "wasteful." All you are doing now is inventing new gods (such as "The Economy" or "The Environment" or "Sustainability" or "Equality") by which you can recreate us into your own image. I do not accept any of these as my God, and although I think each of them are important, there is a hierarchy with respect to the importance of each. For example, the homeless beggars I've encountered on the streets of Toronto and San Francisco (your wonderful urban environments?) concerns me much more than the gasoline that myself and my neighbors use while driving to work. It is not clear to me at all that I should ignore the former and concentrate on the latter.
  6. I agree with many of your points Dr. B, but I offer the following commentary: Since when is the American dream a house in the suburbs? The American dream cannot be reduced to that. Understanding the American dream requires a little historical sense. Take my ancestors, for example, who came here from Ireland during the famine years. Their dream was to escape poverty, work without being taxed to death, and live with the freedom to practise our Catholic faith. All of this and more was achieved. The problem is not, I think, that the American dream is defective. The problem is that the American dream was largely achieved by most people who moved here. Now the problem is: there IS NO DREAM left! Americans have the resources to achieve their goals, but there is no goal left to achieve. We have climbed the bottom of Maslov's hierarchy but have forgotten that there are more rungs to climb. Most people here cannot give an answer if you ask them: What is your goal in life? Most haven't even considered the question. America's real problem is not environmental in nature, or even economic in nature. America's problem is a spiritual problem. What is left when, as all of our Sir Humphreys assert, all we are is little subatomic particles spinning in space and we can't know anything beyond this? Well that is easy: what is left is ME and MY EGO and MY WANTS and MY DESIRES and MY ENTERTAINMENT. Owning a home in the suburbs or the country is not an end in itself. It is a means to living with the following: 1. Low/non-existent crime rate 2. Better schools for our children 3. Lower tax rates 4. Less noise/traffic/pollution 5. Vegetable and flower gardens 6. Cattle, horses, corn and soybean fields 7. Meadows, creeks, fishing, waterskiing So you can walk to work, or ride a subway? Big deal. I can see the beautiful starry galaxies this cold evening without the blinding street lights. My 3 year old can play outside unattended. We can start a big bonfire at any time, invite all the neighbors and friends over, and play volleyball and drink bourbon all night long and nobody calls the police. Are these desires intrinsically evil? Of course not. That's why we will continue to live this lifestyle as long as we can support it. Many of these desires are, however, selfish. But not because we're using up a resource buried thousands of feet in the ground that's no good for anything else, anyway. These desires are selfish because our time and resources could be used more appropriately in achieving our purpose in life - a purpose that you Europeans have been denying the existence of for decades. Our day of reckoning is approaching. We will pay for our sins in the coming economic crisis, and hopefully we will live through it and learn the lesson. You Europeans don't even believe in sins, and then you proclaim us guilty of them anyway. You complain about our debts, but you're still buying our bonds. You don't like our energy use, only because the demand drives up prices for yourselves. You cry that we are enjoying life too much, and yet you have nothing to live for. You say that our lifestyle is unsustainable, while not even reproducing enough children to replace your dying. I cannot understand why you guys are so worried about the US economy going into recession/depression. This ain't our first rodeo and it's likely it won't be the last. It's about time we had a nice crisis. We need to cut our government and military in half (at least) and get rid of the fiat dollar anyway. I'm getting fat and need to miss a few meals. What's the big deal with going back to an export economy? Are you worried that we'll stop buying all the flat screens produced in HK? Mass rail transportation? In the U.S.? Are you going to loan us a few more trillion to build this infrastructure? You guys will probably still be riding diesel engine powered trains and burning thousands of gallons of jet fuel on your plane trips for decades after we roll out the first solar or hydrogen powered vehicles. Where is all the discussion on GEI about investing in mass rail transportation providers? There's not much, because it's likely only feasible in major metropolitan areas even if oil prices double from here. The real investment opportunities are in the areas that are commonly discussed on GEI: solar, hydrogen, wind/wave power, superconductors, biotech, etc. I frankly won't miss all the oil when it's gone. It will give me a good excuse to install the geothermal well and heat pump that doesn't make economic sense to install in my home right now. If you were really serious about saving energy, you should start with the biggest user of energy. It is not transportation. It is buildings. And you guys are well behind the curve in building energy efficiency. In fact, the suburban/country home may well be the path to an energy efficient future since there is enough land area for vertical or horizontal geothermal heat exchangers (there is not in an urban environment) and there are big rooftops for solar collection. -
  7. oops...sorry Frizzers I didn't realize you were the author as I didn't click the link the first time. I agree with most of your points except for Galore Creek being fabulous and the necessity of owning gold rather than the equity in gold miners. The latter seems to be your thesis, however, so I guess I'm in disagreement here. Bubb, I have no clue on short-term bounces. Your indicators are better than mine. I do think NG is a better investment now than it was a couple months ago. Donlin seems to be a slightly higher grade deposit. It's going to be the same situation, however, as far as requiring huge capex. So which is going to win the race: construction inflation or price of gold? I'm trying to stay away from these high capex/low grade miners now. Looking for more GORO types. YNG.to also looking good the past couple of days.
  8. Interesting; I will have to take a look at this. Frankly, however, I was never very impressed with LionOre management. I did a lot of DD on LIM in 06 (well before the big nickel runup in 07) and took a pass specifically because of what seemed to be management incompetency. I believe it was the 2005 annual report that specifically scared me away. Remember, these are the guys whose Board of Directors RECOMMENDED selling the company for WAY less than what Norilsk finally bought them for in the bidding war with Xstrata. I have a word file on my harddrive called the "Hall of Shame" and all of the former Lionore and Rio Narcea board of directors are on that list, since neither of them did enough work to get maximum value for shareholders when they decided to sell out.
  9. Galore Creek was never a fantastic property. It was just big. If the author of this had read the feasibility study he would have known that Galore Creek was a marginal property to begin with - even before the capital costs skyrocketed. I never thought the project would be entirely canceled, but I was concerned enough about it to stay away from investing in NG. Here is a link from a discussion of this back in July: Galore Creek: Marginal Economics
  10. AceofKY

    A question for gold bulls

    There is probably an old chinese proverb that says something about not trying to prove something to one who doesn't believe in proofs. Thus, I am going to drop this argument. I will, however, go back and review (as time allows) some of Mises' work. Many of our readers here on GEI are probably unaware of him. Take this gem, for example, written in 1946 that has described almost exactly the events of this year (credit contraction, Novagold's dropped Galore Creek project, etc). The only thing Mises didn't foretell here is that the world's governments would align together to inflate the currency even when banks stop doing so. http://www.mises.org/manipulation/section5.asp 5. The Effects of Politically Lowered Interest Rates The expansionists are quite right in asserting that credit expansion succeeds in bringing about booming business. They are mistaken only in ignoring the fact that such an artificial prosperity cannot last and must inextricably lead to a slump, a general depression. [p. 221] If the market rate of interest is reduced by credit expansion, many projects which were previously deemed unprofitable get the appearance of profitability. The entrepreneur who embarks upon their execution must, however, very soon discover that his calculation was based on erroneous assumptions. He has reckoned with those prices of the factors of production which corresponded to market conditions as they were on the eve of the credit expansion. But now, as a result of credit expansion, these prices have risen. The project no longer appears so promising as before. The businessman?s funds are not sufficient for the purchase of the required factors of production. He would be forced to discontinue the pursuit of his plans if the credit expansion were not to continue. However, as the banks do not stop expanding credit and providing business with ?easy money,? the entrepreneurs see no cause to worry. They borrow more and more. Prices and wage rates boom. Everybody feels happy and is convinced that now finally mankind has overcome forever the gloomy state of scarcity and reached everlasting prosperity. In fact, all this amazing wealth is fragile, a castle built on the sands of illusion. It cannot last. There is no means to substitute banknotes and deposits for non-existing capital goods. Lord Keynes, in a poetical mood, asserted that credit expansion has performed ?the miracle . . . of turning a stone into bread.?(1) But this miracle, on closer examination, appears no less questionable than the tricks of Indian fakirs. There are only two alternatives. One, the expanding banks may stubbornly cling to their expansionist policies and never stop providing the money business needs in order to go on in spite of the inflationary rise in production costs. They are intent upon satisfying the ever increasing demand for credit. The more credit business de mands, the more it gets. Prices and wage rates sky-rocket. The quantity of banknotes and deposits increases beyond all measure. Finally, the public becomes aware of what is happening. People realize that there will be no end to the issue of more [p. 222] and more money substitutes?that prices will consequently rise at an accelerated pace. They comprehend that under such a state of affairs it is detrimental to keep cash. In order to prevent being victimized by the progressing drop in money?s purchasing power, they rush to buy commodities, no matter what their prices may be and whether or not they need them. They prefer everything else to money. They arrange what in 1923 in Germany, when the Reich set the classical example for the policy of endless credit expansion, was called die Flucht in die Sachwerte, the flight into real values. The whole currency system breaks down. Its unit?s purchasing power dwindles to zero. People resort to barter or to the use of another type of foreign or domestic money. The crisis emerges. The other alternative is that the banks or the monetary authorities become aware of the dangers involved in endless credit expansion before the common man does. They stop, of? their own accord, any further addition to the quantity of banknotes and deposits. They no longer satisfy the business applications for additional credits. Then the panic breaks out. Interest rates jump to an excessive level, because many firms badly need money in order to avoid bankruptcy. Prices drop suddenly, as distressed firms try to obtain cash by throwing inventories on the market dirt cheap. Production activities shrink, workers are discharged. Thus, credit expansion unavoidably results in the economic crisis. In either of the two alternatives, the artificial boom is doomed. In the long run, it must collapse. The short-run effect, the period of prosperity, may last sometimes several years. While it lasts, the authorities, the expanding banks and their public relations agencies arrogantly defy the warnings of the economists and pride themselves on the manifest success of their policies. But when the bitter end comes, they wash their hands of it. The artificial prosperity cannot last because the lowering of the rate of interest, purely technical as it was and not corresponding to the real state of the market data, has misled entrepreneurial calculations. It has created the illusion that certain projects offer the chances of profitability when, in fact, [p. 223] the available supply of factors of production was not sufficient for their execution. Deluded by false reckoning, businessmen have expanded their activities beyond the limits drawn by the state of society?s wealth. They have underrated the degree of the scarcity of factors of production and overtaxed their capacity to produce. In short: they have squandered scarce capital goods by malinvestment. The whole entrepreneurial class is, as it were, in the position of a master builder whose task it is to construct a building out of a limited supply of building materials. If this man overestimates the quantity of the available supply, he drafts a plan for the execution of which the means at his disposal are not sufficient. He overbuilds the groundwork and the foundations and discovers only later, in the progress of the construction, that he lacks the material needed for the completion of the structure. This belated discovery does not create our master builder?s plight. It merely discloses errors commit ted in the past. It brushes away illusions and forces him to face stark reality. There is need to stress this point, because the public, always in search of a scapegoat, is as a rule ready to blame the monetary authorities and the banks for the outbreak of the crisis. They are guilty, it is asserted, because in stopping the further expansion of credit, they have produced a deflationary pressure on trade. Now, the monetary authorities and the banks were certainly responsible for the orgies of credit expansion and the resulting boom; although public opinion, which always approves such inflationary ventures whole heart edly, should not forget that the fault rests not alone with others. The crisis is not an outgrowth of the abandonment of the expansionist policy. It is the inextricable and unavoidable aftermath of this policy. The question is only whether one should continue expansionism until the final collapse of the whole monetary and credit system or whether one should stop at an earlier date. The sooner one stops, the less grievous are the damages inflicted and the losses suffered. Public opinion is utterly wrong in its appraisal of the phases of the trade cycle. The artificial boom is not prosperity, but the [p. 224] deceptive appearance of good business. Its illusions lead people astray and cause malinvestment and the consumption of unreal apparent gains which amount to virtual consumption of capital. The depression is the necessary process of readjusting the structure of business activities to the real state of the market data, i.e., the supply of capital goods and the valuations of the public. The depression is thus the first step on the return to normal conditions, the beginning of recovery and the foundation of real prosperity based on the solid production of goods and not on the sands of credit expansion.
  11. Are you suggesting that the world's poorer people would be better off if Americans were unable to buy their products?
  12. AceofKY

    A question for gold bulls

    Humphrey, I think we are basically in agreement that we need both reason and empirical data to understand the world. I think we differ as to the level of certainty that can be achieved and the usefulness of empiricism in understanding certain aspects of the world. It's still not clear to me why you think Mises' theory of inflation/business cycles etc is incorrect. I understand you don't like his methodology, but you have already conceded that his logic is sound. So which of his premises do you think are incorrect?
  13. AceofKY

    The Weimar hyperinflation thread -

    Good summary, UNSHURE. I'm not exactly certain how it's going to play out either. We in the US do have options, of course, to prevent a future total currency/economy collapse - like electing a government who will return to sound money policies. That's not likely going to happen, unfortunately, until the collapse is well underway. That is why I keep a portion of my net worth in (hopefully) inflation-hedged assets.
  14. AceofKY

    The Weimar hyperinflation thread -

    How do you think the US is going to get rid of its trillions in debt? We certainly aren't (can't) going to pay it off the legitimate way! At some point the US will have to default or otherwise resort to even more currency generation than what is already taking place.
  15. AceofKY

    A question for gold bulls

    So you don't accept mathematics? Isn't math still considered a priori reasoning?
  16. AceofKY

    A question for gold bulls

    But you don't believe in truthful premises! You only believe in probable premises, if I am understanding you correctly. Therefore, the argument must only be probably true. There cannot be a valid and true argument under pure empiricism, can there? Why do you think knowledge can't be a product of both pure reason AND experience? That is not counter-evidence at all. Remember, this is just a chart showing the correlation between prices as measured in US$ and the amount of currency in circulation. There are so many variables in play, prices can go up or down or stay the same in the short term. We have already stipulated this. What the chart shows is that there is a very strong inverse correlation over the long term that inflation (i.e. the increase of the quantity of currency in circulation) leads to a decrease of the purchasing power of the dollar.
  17. AceofKY

    A question for gold bulls

    I am truly certain of lots of things. For example, I am truly certain that when I measure a room to be 20' x 40' that it consists of an area of 800 square feet. Now, you may claim that that is just a tautology, but in fact it is very useful information when I am designing the lighting and HVAC systems for that room. There is not the slightest doubt in my mind that that room consists of an area of 800 square feet, even though I haven't actually measured the area itself. Mathematics is just a simple example that uses a priori arguments. John Henry Newman's work in an "Essay in Aid of a Grammar of Assent" presents an epistemology in which one can achieve certainty on propositions deriving from a posteriori reasoning and experience also. Now, I am not claiming that I've reached anywhere near this level of certainty with respect to economics, but I do think Newman did some good work here. Why is it that only Mises' arguments have no evidence but Keynes' arguments have all kinds of evidence? I understand that Mises himself rejected empiricism, but you (as an empiricist) have no justification for throwing out his arguments without looking at the evidence. When I look at what is going on in the economy right now (money supply increasing rapidly, prices rising fast, credit bubbles, housing busts, etc) I see all kinds of evidence that makes Mises look like a prophet and Keynes look like a failure. Now who is making arguments without evidence? This is the question we are trying to resolve, and you are asserting the answer without isolating a specific case, controlling all the parameters (including people's subjective demand for goods/services), varying only the amount of currency in circulation, and coming to a scientific conclusion on whether inflation is good or bad for EVERYONE. Isn't that the empirical method of ascertaining a high probability of truth? Of course, this can't be done in economics (as you mentioned above) because of the subjectivity of the human person. Besides, Mises stipulated that a little inflation helped some people. His argument was that it was not good for all people because many people are damaged by inflation, and that too much of it would, in fact, eventually damage everyone. It seems to me that using your epistemology there is no reason to think at all about economics because: 1. All knowledge derives from experience. A priori "thinking" is useless without rigorous empirical evidence. 2. One can never be certain of anything (including experience of the past). Probabilities are all we can hope for. 3. Probabilities cannot be determined accurately (i.e. - rigorous empirical evidence is unobtainable) on a macroeconomic level due to human subjectivity and multiplicity of variables. 4. Since probabilities cannot be determined accurately ("it is impossible to say what the future may bring"), we have no way of making rational judgments or taking action to shape that future in our favor. As I mentioned before, I don't think I'd make it out of bed in the morning with this mindset. Don't get me wrong - I'm no cheerleader for Mises' epistemology or his philosophy in general. But I do think his explanation of monetary economics/business cycles is the best explanation I've read.
  18. AceofKY

    A question for gold bulls

    I agree - but I wouldn't call a credit collapse "deflation" simply because I still use the old definition of inflation/deflation which is just an increase/decrease in the amount of currency in circulation (i.e. - we can be experiencing inflation even if prices are falling). Yes, there is definitely a distinction to be made between money and credit, but in fact they are also very interrelated as everyone learns in Econ 101 with respect to fractional reserve banking.
  19. This is good news. Now they can get everyone under contract so capital costs are mostly locked in. No warrants on the PP, and the stock price didn't budge even though the placement was 10% under market value. The Reids are definitely managing this to benefit shareholders. That's why it's important (I believe) to invest in companies with substantial management ownership. Now if only the share price would fall so I could pick up more GORO. Seems like every junior is falling except for the ones I want more equity in.
  20. AceofKY

    A question for gold bulls

    Is that supposed to inspire confidence in your position? Your argument sounds as if you're suggesting that certainty of true knowledge can only be established by empirical data and the scientific method. In fact, empiricism by itself doesn't have much of a track record of establishing anything that a normal person would call truth. Our textbooks have to be thrown out every few years because new empirical data reveals that the previous conclusions (based on previous empirical data) were incorrect. Granted, we have a lot of INSTRUMENTAL knowledge from empiricism, but that doesn't necessarily make it TRUE knowledge. We gain certitude of truth not through experience alone, but via a combination of experience and reason (along with a little emotion and intuition too). By your criteria of truth (strict scientific demonstration), we would never be truly certain of anything. Even Russell acknowledged that true knowledge is a product of both a priori knowledge and perceptual knowledge. Mises, I think, probably does neglect the latter of these, but I think you are neglecting the former. The issue at hand is whether inflation of the currency is detrimental to some people's lives or not. Mises provides a rational basis to believe that it is. History provides an empirical basis to believe that it is. No, I cannot construct a strict scientific demonstration to "prove" that this is the case. If I had to do that for every decision I make in life than I probably wouldn't make it out of bed in the morning.
  21. AceofKY

    A question for gold bulls

    I thought British empiricism was dead already? Seriously, being a realist, I would argue that logic can lead one to understand truth. Of course, one can choose to ignore the truth if no empirical evidence is available (or even if evidence is available which I think is the case we are dealing with now). The criterion of whether something is "true" or not does not, for the realist, depend upon any particular person's experience of that truth. To say that a concept is true is to acknowledge that said concept actually conforms with the real structure of reality. One can certainly be mistaken, but only because the concept does NOT conform to reality. Of course, you are not a realist so this argument is probably going to be fruitless, isn't it? But then, if you are not a realist aren't all arguments fruitless anyway? I think we covered this in a past thread... So if I propose, as I believe was the original contention of this thread, that CETERUS PARIBUS an increase in the money supply will lead to an increase in prices measured in that money, it does not matter that that situation has never existed in history (when has a ceterus paribus situation ever existed?). What matters is whether or not it is true. Because if it is, there are certain consequences which will then follow from it. Not the least of which is that those who receive the increase in the money supply initially BENEFIT from it, whereas those who merely get the trickle down effect are HARMED by it. Your argument (I think?) is that we don't really know if or how much certain people are harmed by the increase in the money supply because there are many other factors in play such as supply and demand, etc. I think, in fact, that we have all kinds of experience (Zimbabwe, Weimar Germany, etc) that indicate that many people are harmed when the state inflates its currency and the more it is inflated the more they are harmed and can even be impoverished. Now who is ignoring the evidence? The issue is NOT whether, as you state "printing money is only inflationary if it is literally printed without an increase in demand." I've already indicated that no one cares what happens to the level of prices as such. What matters is that REAL WEALTH is being transferred from one group of citizens to another without their consent. This can happen regardless of whether prices as such are rising or falling. Yes, it can be demonstrated logically. Mises did a fairly good job, I thought, in Human Action in demonstrating this. I also believe that this logical deduction is furthermore confirmed in our experience. For all of his faults, I think Mises pretty much nailed our current economic situation with his predictions written many decades ago.
  22. AceofKY

    A question for gold bulls

    I am neither a philosopher nor an economist, but it seems to me that you keep equating "inflation" with a "rise in prices" as if they are the same thing. I could care less if prices rise, as long as incomes/asset prices (for all persons - not just the wealthy) rise in proportion such that "real net worth" is not eroded. In fact, that is not what happens at all. Some people are helped by the printing of money and others are devastated by it. I think I do know how the story will end, because it is a story told over and over again neither by philosophy nor economics but by history. Eventually the currency will go into a death spiral and collapse, followed by economic collapse and then (very likely unless we have very benevolent neighbors) the final collapse of the state (Zimbabwe is a good example with only the final ending of the story left to be written). I hope that does not happen in my lifetime, but if the current rate of so-called "liquidity" injections continues it would not surprise me. Yes - we do need state intervention. We need the state to intervene to protect the integrity of the currency rather than undermining it to fund its warfare/welfare policies.
  23. AceofKY

    A question for gold bulls

    Maybe not, but why read the whole story if you already know the plot, the characters, and how the story will end?
  24. AceofKY

    A question for gold bulls

    Actually, I'd say it is much riskier to hold 100% cash earning interest as opposed to holding at least a portion of your net worth in real assets that can't be inflated away. I don't follow the UK currency, but Americans holding cash in money markets (approx. 5% interest) over the past few years have been losing net worth to inflation. I assume your ISA account is similar to our IRA (individual retirement account). These do have some value, I think, since one can buy/sell any stock on the market or even invest in real estate. I have a couple IRAs although I no longer fund them. It's the US 401k plan that I think is one of the biggest ripoffs in this country's history. One of these days people are going to wake up in this country and realize that they have wasted their whole lives contributing to mutual funds who barely keep up with inflation.
  25. AceofKY

    A question for gold bulls

    You don't need to be rich or even take delivery of physical. Take a look at goldmoney.com
×