Austrian economics = faulty due to paradox

Who cares about the amount of gold above ground, your link gave no indication of how much gold is left to be mined in the future. It's not renewable anyway, and it will strangle economic growth if it was the only money available.

Quote from nevadan:
So believe what you want about Federal Reserve Notes. They are becoming worth less by the day and will become worthless eventually.
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If the fed is truly Keynesian, the interest rates will be going up as soon as inflation gets on the horizon after this crisis is over.

Believe what you want, but when the interest rates go up, the notes will be worth MORE.
 
If the fed is truly Keynesian, the interest rates will be going up as soon as inflation gets on the horizon after this crisis is over.

Believe what you want, but when the interest rates go up, the notes will be worth MORE.
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OK pal, you get the last word.
 
Quote from nevadan:

OK pal, you get the last word.
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Tired of thinking critically are we?

There's good reasons the vast majority of academic economists ignore the austrian school.

But if Ron Paul subscribes to it, it MUST be true.
 
Tired of thinking critically are we?
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It is pointless to continue. I reject your premise that a fiat currency is necessary for the maintenance of prosperity and hold that it is the key to government interference in the daily lives of citizens. I expect that everyone reading this thread has heard this before, but it bears repeating.

"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild, 1790.

It is very unlikely that any kind of hard money currency system will come into being without a collapse of some kind. If and when it does we'll see how much those notes are worth. So in the meantime perhaps we should just agree to disagree and let it go at that.
 
Quote from nevadan:

It is pointless to continue. I reject your premise that a fiat currency is necessary for the maintenance of prosperity
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I never said that fiat was necessary for anything. I said that hard currency is useless and would undermine economic prosperity. If you look back, you'll see my argument is solely against hard currency, not for anything. I don't argue for fiat currency, but rather I have the opinion of fiat being the better alternative. Because no one has provided a solution to the problems I raised with hard currency. The arguments against hard currency leave me no other option than have the opinion that fiat is the better option, because so far there are only two options presented here.

Saying that fiat is better than hard currency is not a premise, it's a conclusion.
 
quote from stefan 777:
I never said that fiat was necessary for anything. I said that hard currency is useless and would undermine economic prosperity. If you look back, you'll see my argument is solely against hard currency, not for anything. I don't argue for fiat currency, but rather I have the opinion of fiat being the better alternative. Because no one has provided a solution to the problems I raised with hard currency. The arguments against hard currency leave me no other option than have the opinion that fiat is the better option, because so far there are only two options presented here.

Saying that fiat is better than hard currency is not a premise, it's a conclusion.
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I've re-read your posts and it seems your conclusion is based on the idea that the supply of gold would eventually be to small to allow trade based on the quantity of metal required to equal to some specified dollar amount. I am arguing that the quantity in existence will always be sufficient. How is that possible? The purchasing power of that dollar is the variable.

The link below addresses many of the questions you have raised. Most of your points are dealt with toward the end of it. It is not a perfect solution but imo preferable to central banking.

http://mises.org/story/1503
 
Quote from Capablanca:
For a short cogent dismissal of Austrian economics from a Nobel winner read this article:
http://www.slate.com/id/9593
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Krugman is a Keynesian-Socialist fool.
The hangover theory, then, turns out to be intellectually incoherent; nobody has managed to explain why bad investments in the past require the unemployment of good workers in the present.
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Bad investments turn out to be bad companies, companies that should not exist. When these companies go broke, a lot of people go out of work hence the increase in unemployment. Anyone remember all those bullshit internet companies from the 90's? They went broke because they had to. They were "bad investments".
Krugman is just applying his Keynesian Income identity, which is (simplest case): Y=C+I+G. So according to "genious" Krugman if I=Investment goes down then C=consumption goes up, assuming Y is constant. But that's wrong because malinvestments are "I" from previous periods not the current period, and the current effect of the "bust" is a crash in "Y".

Krugman admirers are pitiful.
 
Quote from stefan_777:


Okay, even if we could imagine a world without central banks right now, and everyone using their gold as money, what would happen when there's not enough gold to go around.
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You really need to do some research on this subject. I hear the same fallacious argument from Keynesians.

The amount of gold in circulation would simply be stretched thinner, and its value would increase. Saying "there wouldn't be enough gold to go around" is like saying you can't measure a microbe because an inch is too long.

It's a ridiculous argument.

Despite that, I still believe paper currency should be backed by food or agricultural commodities.
 
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