Real Money and Fake Money - Galt's Gulch

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Real Money and Fake Money

Posted by jsw225 10 years, 5 months ago to Economics

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Hi guys! I linked my blog over on another thread concerning Objectivist Essays, which is basically what my blog does. I was asked to make a thread about it the next time I wrote something.

This essay concerns real money and fake money, and the damage done in a FIAT system. It may be basic, but I enjoy focusing my thoughts from head onto paper.

The main link to my blog is in the Title URL, and here's the individual link for this essay: http://dannesrepossessions.wordpress.com... .

SOURCE URL: http://dannesrepossessions.wordpress.com/

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Posted by CircuitGuy 10 years, 5 months ago

Thanks for the article.

I have heard this many times, and it never makes any sense. I can keep track of what fiat money buys and how much I can charge. If prices are reasonably stable, fiat money is a good store of value. It's not good long term. But if I want to buy integrated circuits, buy solder to put them on a board, buy printed circuit board, and I want to sell radio modules, fiat money does a good job. I don't notice the money changing value while I'm walking it to the bank or to trade for a long-term store of value such as an office building.

If there's so much inflation, I should be charging way more and paying way more for parts and contractors. I don't see that happening.

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  Posted by jsw225 10 years, 5 months ago
  
  One of the issues is, "Where is the fake money going?" It's not an easy question, but the biggest destination of the phoney money right now is the stock market. It is no coincidence that the printing press is running 24/7, and the ONLY thing that is booming is the NYSE. Savings are down, income is down, but the stock exchange is up?
  
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    Posted by CircuitGuy 10 years, 5 months ago
    
    Prices of businesses lead earnings. The market's expectation of future earnings get priced in. We just went through a recession, and now we're in expansion. That's priced into the market. I don't know how long the expansion will continue, but market participants believe it will continue.
    
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      Posted by jsw225 10 years, 5 months ago
      
      Expansion? Your silliness makes me chuckle. If you take the government's claim of 2% inflation, the growth in GDP is less than the GDP's devaluation due to inflation.
      
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        Posted by CircuitGuy 10 years, 5 months ago
        
        US has had positive growth in real (i.e. inflation-adjusted) GDP for many quarters.
        
        I do not associate it with any gov't policies. It's all people going out and finding ways to solve other people's problems and provide services to them.
        
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