how inflation comes about

Tradex said:
Every time someones talks about inflation or the central banks, @piezoe magically appears and writes a freaking book (to defend the Elite of course), have you noticed?

Quick example from his post above : "If the Central Bank should decide that blah blah blah..."

Note that he does not explain WHY central banks should exist in the first place, even though our Founding Fathers were clearly against them (for good reasons).

Anyway.
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As I've demonstrated on several posts here, the frequency and duration of recessions in the U.S. was significantly higher in the century before the establishment of the Fed than in the century after. Vastly oversimplified, but basically your reason why, laissez faire leads to unnecessarily longer and more frequent system shocks no matter if you're talking about an economy, an ecosystem, or a control system.

I am curious as to any counterexamples of counties with their own currency and a significant economy who have had better economic success without a central bank?

And why in the world should the opinions of a bunch of farmers and small merchants in a pre industrial revolution, tiny agrarian economy at least partially based on slave labor have any relevance whatsoever on what's optimal for our economy today?
 
Sig said:
As I've demonstrated on several posts here, the frequency and duration of recessions in the U.S. was significantly higher in the century
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Bullshit

Regardless - as you yourself also said it was "a bunch of farmers and small merchants in a pre industrial revolution" - Recessions (which are corrections to excesses) cannot be outlawed.

No matter how hard "well-intentioned" PHD's at The Fed try.
 
SunTrader said:
Bullshit

Regardless - as you yourself also said it was "a bunch of farmers and small merchants in a pre industrial revolution" - Recessions (which are corrections to excesses) cannot be outlawed.

No matter how hard "well-intentioned" PHD's at The Fed try.
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First off, the industrial revolution in the U.S. was 100 years before the Fed was established.

Second, who said anything about outlawing recessions? I believe in the exact opposite, a Fed makes inevitable recessions less frequent and shorter, as history has proven.

And most importantly, which modern large economy countries without a central bank would you point to as examples of what you advocate for?
 
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The US dollar is the world's reserve currency.
How the U.S. Dollar Became the World's Reserve Currency (investopedia.com)
There isn't any currency that is capable of replacing it. Most countries "managed" their exchange rate against the US$ in order to remain competitive in global trade. Economists often coin it as racing to the bottom.
For non-reserved currency, once there is a capital flight, exchange rate will spike and value of currency diminish fast. Hyper inflation ensue.
 
Sig said:
First off, the industrial revolution in the U.S. was 100 years before the Fed was established.

Second, who said anything about outlawing recessions? I believe in the exact opposite, a Fed makes inevitable recessions less frequent and shorter, as history has proven.

And most importantly, which modern large economy countries without a central bank would you point to as examples of what you advocate for?
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First - Your words. Why then did you refer to it when referencing The Fed?

Second - My words outlawing recessions because that is what they have been trying to do since QEternity began.
 
happy trading said:
i understand that inflation happens if the costs to produce the goods go up, such as if all the laborers demand a raise then the store will have to charge more. what i don't understand is that they say when the fed prints money then that creates inflation (could be i am remembering wrong and this does not cause inflation rather it has a different effect) . but i would think that this should only apply when they are giving the money to everybody such as stimulus checks, but why does the fact that they are buying bonds create inflation (i'm under the assumption that it does)? everytime they buy bonds the money is ending up in our pockets? for some reason i never felt it in mine!!
thanks for putting up with my ignorance and looking forward to the responses
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Money supply increases and price inflates. When growth does not utilize full capacity inflation stimulates growth. Kinda like a closed loop control. When it works as expected to work it works. But in modern times people tend to live longer and as they get older they don't spend instead save and this derails the theory depending on population of those that don't spend.
 
SunTrader said:
First - Your words. Why then did you refer to it when referencing The Fed?

Second - My words outlawing recessions because that is what they have been trying to do since QEternity began.
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Perhaps reread what I wrote? I was responding to @Tradex who said we shouldn't have a Fed because the founding fathers were against it. I pointed out that 1776 United States was a small agrarian slave based economy while the 1913 United States was very different large industrial based one, so their opinion on the matter is irrelevant. I'm really at a loss for what your point is, do you disagree and think the founding father's opinion is relevant?

And still waiting for an example of a successful first world economy without a central bank?
 
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