Brain drain

JBee

Well-known member
First Name
JB
Joined
Nov 22, 2019
Threads
18
Messages
4,752
Reaction score
6,129
Location
Australia
Vehicles
Cybertruck
Occupation
. Professional Hobbyist
Country flag
And you don't seem to care about any other side of the balance sheet than that one.
What other side of the balance sheet??

I have never seen or heard of the fed money being destroyed, except for cash notes that are taken out of circulation, but continue to exist in virtual balance sheets.


Did every country in the world magic up cash to spend?
A most definite yes. Every country has been pumping fiat like there's no tomorrow. I would like to see one that didn't. Same global monetary policy. All money markets are manipulated, but mostly from so sovereign governments. They are corps-o-rations like any other.

Hence EMs resistance to the gov. handouts and he welcomes the correction and is preparing for it.

But regardless of who exactly is "profiting", all currency creates value liquidity that ultimately flushes value through to the top corporations, that in turn lobby governments for benefits to themselves. These funds are then artificially multiplied, by being borrowed into existence through fractional lending and pedaled as "payment notes", but in reality are "debt notes" on society, that need to be repaid by people like you and me.

Every product or service stems from the economy of people, hence no debt can ever be repaid by corporation or government without actual physical people providing the repayment through private personal effort. This is why "they", the gov, fed and corps, are borrowing from "our" personal future. Not theirs, ours.

In any case the conversation should not be detracted by high school economics, in that it is very real that a correction is occurring and is likely to continue and everyone would be wise to make adjustments accordingly, not just Tesla.
Sponsored

 

Crissa

Well-known member
First Name
Crissa
Joined
Jul 8, 2020
Threads
126
Messages
16,227
Reaction score
27,092
Location
Santa Cruz
Vehicles
2014 Zero S, 2013 Mazda 3
Country flag
What other side of the balance sheet??

I have never seen or heard of the fed money being destroyed, except for cash notes that are taken out of circulation, but continue to exist in virtual balance sheets.
That you have never, tells me you have never gotten past a primary school understanding of how macroeconomics work, let alone maybe even that?

So no, your entire rant is misinformed and straight up foundationless.

The monetary cycle has lots of inputs and exits. Even the basic thing 'joe lost a dollar down the drain' is probably the easiest form of monetary destruction you can understand. The American economy has millions of dollars effectively lost from happenstance every year. In fact, for the last couple decades printing pennies has been (as long as the cost of copper the government paid was low enough) effectively dollar destruction because most charge would not return to banks.

That's why there was a coinage shortage during the pandemic.

But there's lost of other ways for money to be 'destroyed'. It gets lost in accounts. It gets taxed away - most taxes and fees effectively subtract from the money supply. Other money is shipped overseas and disappears, often never to be seen again; billions vanish this way.

There's also merely the money that gets sucked up in lowly savings accounts... that money is effectively no longer being circulated, so it is a deflationary effect as well. Money falling into the hands of investment bankers becomes giant chunks that stops being circulated with any speed.

...and that's just one cycle. There's counter-cycles everywhere. GDP growth gets pumped by nonexistent money entering the economy from other directions - from leverage sources like banks or investment leverage like shorts or foreign markets. And physical things that the money is used to buy - especially at these very large levels like government or corporate purchases - can then get destroyed, which reduces the economy's size. All those shorts leaving the market were actually deflationary because they had to sell something to cover their positions but those positions didn't represent actual activity so it just appears to disappear (though the cash doesn't).

And the way we measure inflation - that one bugaboo of yours - is based upon retail prices. If you can't find the major flaws in that, well...

Prices are set by cartels, both formal and informal. Retail shoppers can easily find the cheapest price on Amazon, sure - but that product has to be there. For many things, the retail shopper doesn't have much price discrimination ability. They have a limited number of shops they can choose from. I can choose Costco for my has instead of Shell...

...but then Costco can't choose a different refiner to buy from. There's no 'cheaper' refiner.

So this ratchet is built into the system. Everyone thinks prices are going up? Well, that's a good time to raise prices and blame inflation!

How can we tell they're doing this? Profit. Profit is straight up the measure of how much companies are able to fleece their customers. Profit is their revenue minus their costs. If costs went up, and they raised prices to cover it, their profits shouldn't change. Their revenue would rise, but profit, which is a percentage, would not change.

But their profits are at record level.

-Crissa
 

JBee

Well-known member
First Name
JB
Joined
Nov 22, 2019
Threads
18
Messages
4,752
Reaction score
6,129
Location
Australia
Vehicles
Cybertruck
Occupation
. Professional Hobbyist
Country flag
Not sure how any of these last two posts are contrary to what I wrote, just that I did in less words? :unsure:

As for my comment regarding money notes being taken out of circulation but left on virtual balance sheets, this happens all the time, but only represents a fraction of the fiat being pumped into the system and as such is "just" the cost of doing business. All cash represents less than 8% of worldwide fiat currency and currency only a tenth of derivatives etc.

Thats just simply not where the bulk of monetary value lies at all. Feel free to read my post again to see what I'm actually saying..
 
Last edited:

Crissa

Well-known member
First Name
Crissa
Joined
Jul 8, 2020
Threads
126
Messages
16,227
Reaction score
27,092
Location
Santa Cruz
Vehicles
2014 Zero S, 2013 Mazda 3
Country flag
It's contrary because you are taking one (of many) inputs into a system and predicting the output without regard to the other factors.

Inflation isn't like a bucket, where you add money, and the inflation (level in the bucket) rises. If it is a bucket, it's a leaky one with multiple hoses leading in and out. The level isn't so simple.

If it were that the economy was overheated from money supply, we wouldn't see GDP and market contraction (which we saw in the first and second quarter of the year). We would see record numbers of companies being profitable, and exerting pricing control (which we are seeing), but we would also see record investment into industries to break that pricing control (which we aren't).

Inflation isn't some natural event or nonsubjective statistic. It's controlled most directly by the greed of the underlying market. If the market is controlled or acting as though it is controlled by a cartel, well... And that's what's happening in the oil sector right now.

-Crissa
 

Crissa

Well-known member
First Name
Crissa
Joined
Jul 8, 2020
Threads
126
Messages
16,227
Reaction score
27,092
Location
Santa Cruz
Vehicles
2014 Zero S, 2013 Mazda 3
Country flag
The velocity of money is a crazy one, but it's why GDP can go up and down without any change in the actual numbers of dollars in the system. It's also why inflation can go up or down the same...

And worse, the effect on inflation is based upon how people expect inflation to be, more than underlying functions.
NPR: How Fake Money Solved Inflation

-Crissa
 


JBee

Well-known member
First Name
JB
Joined
Nov 22, 2019
Threads
18
Messages
4,752
Reaction score
6,129
Location
Australia
Vehicles
Cybertruck
Occupation
. Professional Hobbyist
Country flag
It's contrary because you are taking one (of many) inputs into a system and predicting the output without regard to the other factors.

Inflation isn't like a bucket, where you add money, and the inflation (level in the bucket) rises. If it is a bucket, it's a leaky one with multiple hoses leading in and out. The level isn't so simple.

If it were that the economy was overheated from money supply, we wouldn't see GDP and market contraction (which we saw in the first and second quarter of the year). We would see record numbers of companies being profitable, and exerting pricing control (which we are seeing), but we would also see record investment into industries to break that pricing control (which we aren't).

Inflation isn't some natural event or nonsubjective statistic. It's controlled most directly by the greed of the underlying market. If the market is controlled or acting as though it is controlled by a cartel, well... And that's what's happening in the oil sector right now.

-Crissa
I'm still NOT talking about inflation. Didn't mention it.

You are though, so enjoy the conversation with yourself. :)
 

Crissa

Well-known member
First Name
Crissa
Joined
Jul 8, 2020
Threads
126
Messages
16,227
Reaction score
27,092
Location
Santa Cruz
Vehicles
2014 Zero S, 2013 Mazda 3
Country flag
I'm still NOT talking about inflation. Didn't mention it.

You are though, so enjoy the conversation with yourself. :)
...?

...trillions since 2008 in this great revolving door ponzi scheme. People don't get what a trillion is. Every dollar you print halves the value of another dollar out there.
Then what was your point?

-Crissa
 

JBee

Well-known member
First Name
JB
Joined
Nov 22, 2019
Threads
18
Messages
4,752
Reaction score
6,129
Location
Australia
Vehicles
Cybertruck
Occupation
. Professional Hobbyist
Country flag
...?


Then what was your point?

-Crissa
My first post on this thread was:


Not 2008, likely worse.

Somebody has to pay back all that fake fiat currency that has been pumped in by the fed in the trillions since 2008 in this great revolving door ponzi scheme. People don't get what a trillion is. Every dollar you print halves the value of another dollar out there.

I think Tesla can cut 10% of employees just on the factory space construction side alone, and have zero impact on production or development capacity. Its also a good way to get people motivated, which I think is more important atm for ramping production, and that can offset the loss.
My comment is simply referring to the "fact" that a non-representative fiat currency that is operated in a ponzi scheme (debt paying off debt with exponential growth etc etc) does not provide equity or for equality in any form, and by it's nature MUST be subject to corrections, as is being predicted by EM and I think will likely be worse than 2008. Inflation is an effect of this correction occurring, not the cause.

I can agree that many corporations are corrupt and profiteers, but that is because it is illegal for a corporation NOT to make a profit. Although it and governments are "legal entities" it is a bodiless form without natural consequence, and a mere illusion of a artificial man made structure, to exploit the real economic behavior of physical people.

So it is a false system structure to begin with, and using itself, or how it works, as a metric to justify it's existence, is therefore counter productive.

A first principles conversation would have to take place outside of convention.

EM's question of "what is the economy with infinite labor" is the real question we should be investigating.
 

Crissa

Well-known member
First Name
Crissa
Joined
Jul 8, 2020
Threads
126
Messages
16,227
Reaction score
27,092
Location
Santa Cruz
Vehicles
2014 Zero S, 2013 Mazda 3
Country flag
So you're trying to say you didn't mean inflation when you totally meant inflations and I'm supposed to... accept your 'fact' and 'musts' even though they aren't and you'e just trying to make assertions which aren't borne out by evidence?

-Crissa
 

JBee

Well-known member
First Name
JB
Joined
Nov 22, 2019
Threads
18
Messages
4,752
Reaction score
6,129
Location
Australia
Vehicles
Cybertruck
Occupation
. Professional Hobbyist
Country flag
So you're trying to say you didn't mean inflation when you totally meant inflations and I'm supposed to... accept your 'fact' and 'musts' even though they aren't and you'e just trying to make assertions which aren't borne out by evidence?

-Crissa
Let's get some common ground so let me flip the comments into questions:
  1. Is there a fiat based monetary economy in the natural world?
  2. Is there a product and services based economy in the natural world?
  3. Does inflation exist in the natural world or only in a monetary economy?
Looking forward to your answers.
 


Crissa

Well-known member
First Name
Crissa
Joined
Jul 8, 2020
Threads
126
Messages
16,227
Reaction score
27,092
Location
Santa Cruz
Vehicles
2014 Zero S, 2013 Mazda 3
Country flag
Let's get some common ground so let me flip the comments into questions:
  1. Is there a fiat based monetary economy in the natural world?
  2. Is there a product and services based economy in the natural world?
  3. Does inflation exist in the natural world or only in a monetary economy?
Looking forward to your answers.
1) Irrelevant. Economics is sociological. It's both natural and artificial.
2) Yes, because Humans are natural.
3) Inflation is a concept of relative value. Relative value is seen everywhere, from neurotransmitters to birds trading stones. https://antarcticsun.usap.gov/science/4684/

And look, you went from 'I'm not talking about inflation' when you totally were to now arguing that there's some innate something something not your original argument because...

...The demand for dollars in an economy is not a static thing and doesn't only depend upon the creation of it but many other factors, as pointed out. Even using a non-fiat currency encounters inflation as economic activity increases and relative demand increases. (But with a non-fiat currency you run into hard ceilings which cap growth or extend collapse of the economy. Which any child who's traded bottlecaps on school should learn.)

Fiat is artificial and allows us to counteract those economic forces.

What would, for instance, happened had we not been able to add money to the economy during the pandemic?

-Crissa
 

JBee

Well-known member
First Name
JB
Joined
Nov 22, 2019
Threads
18
Messages
4,752
Reaction score
6,129
Location
Australia
Vehicles
Cybertruck
Occupation
. Professional Hobbyist
Country flag
Thanks for the reply.

You are right that the field of economics can describe both the natural world and artificial world, but monetary inflation can only exist in a monetary system.

Thats why I'm still not talking about inflation, rather how money is created from nothing, and how that artificial creation process and ponzi scheme is creating a real and physical pressure on the natural world and even mankind. The correction occurs when the artificial needs to reconciled with the physical.

Look at the ignorance of externalities that causes pollution and environmental degradation, all by faulty constructs and beliefs, and the pursuit of profit at all cost. The natural world, including us humans, can, have, and do exist without it, and have done successfully for many millennia.

If you look at the sun or plants, or oceans, its easy to see in the "natural reality" the abundance of the natural world. They have long been the main provider and supplier of goods and services since the beginning of time for humans, and even life. And yet most of these exist without our toil. There are better ways to do things, we do not have to stick to convention, in fact if we do we will most certainly perish.

I like EMs approach to currency, being a method of information exchange for capital allocation. From a resource allocation perspective this makes a lot of sense, in particular the further we get from scarcity towards abundance, simply because profit becomes a irrelevant pursuit.

Let's do the definition of "economy" quick for reference:

"In general, economy is defined 'as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of scarce resources"

Now, once again EM questions this dogma, in that he says: "what is an economy with unlimited labour?" Is there an economy if nothing is scarce and everything we need or want can be provided, sustainably? (our desires need to take a back-seat sometimes though :) )

I like to say that technology is a lever on the environment to enact our will for creating change.

How many horses can we pull, how many fields can we stack, how many simulations can we calculate, how many people can we share information with and how fast, what materials can we artificially make, mass production with robotic labour etc. These should be put to good use by us, the temporary stewarts of earth, but in harmony with natural systems, not by brute force in opposition of it.

Sure it won't likely happen in our generation, probably not even the next, but shouldn't we be striving towards that goal and away from the systems and ideologies that are in fact destroying our habitat, that has been providing for us, for free, for so long?

And if we are striving for those greater things, which lesser things should we be more willing to let go of to make it happen? At a minimum it would be to let go of a fiat currency ponzi scheme. Where the might of the dollar is being forced on all global citizens, by as EM puts it, a corporation in the limit with a monopoly on violence.
Sponsored

 
 




Top