Re: [AdamLanes] what the fuck are you talking about?
There are a lot of things I'd love to comment on, but I'll refrain from that and just make one
quick observation long-winded rant before I get back to
what I was doing drinking heavily:
If we were on an 'Honest money system', and NO new money was printed, wouldn't that existing money become increasingly rare (and hence more valuable) as population increased? If that were the case, then people would just be stashing their cash instead of spending or investing it, since it would be worth more tomorrow than it is today. Prices would end up dropping through the floor due to the increased value of money.... but you're not 'saving' any money by buying a gallon of milk for $1.00 if that dollar is worth 5 times what it used to be when milk was $3.00/gallon.
It all comes down to this: in order for a productive society to exist and everybody to have an abundance of goods and luxuries, people must first create those goods and luxuries (which they do out of want for money). For people to bother creating those luxuries, somebody needs to be willing to buy them.. but nobody will buy them if everybody's stuffing their cash in the mattress because it's increasing in value.
I really think you're underestimating the value of the velocity of money (as somebody explained briefly in the other thread). When a purchase is made, a good or service is sold for profit. When a large amount of goods or services are sold, two things happen: Production of those goods/services becomes cheaper, and more people are employed to create, market, and service that product. These people make more money that they can then go and spend on more products.
If an economy is liquid and people are willing to spend money (or encouraged to by inflation), then it is very easy for an individual or a business to make money.
Ideally, every time a dollar is changed hands everybody wins. The seller makes a profit, and the buyer gets a good. So, if the average dollar changes hands 500 times per month instead of 50 times per month, then there are 10 times more transactions in which one person profits, and the other receives a good. Make sure that you're the former as often as you are the latter, and it doesn't matter what the money is worth that you used to make the exchange.
I'm not sure if I've done the best job of explaining it, but that's my attempt.
I guess my point is this: the overall prosperity of society is based on everybody actively producing, investing, buying, selling, or otherwise participating. If you just sit around and clutch your moneybags in your arms and cry about inflation, inflation will pass you up and you'll lose out because you're not doing anything productive. However, if you're actively going out there and filling a need in the market and are smart about it (making sure you profit from your labor instead of only your employer), inflation won't matter one bit because as prices rise so will your income because your labor/product/service, too, has a price. It will self-adjust.
A fast-moving economy is like the Bridge Day party at Holiday Inn Oak Hill after a busload of Hooters Girls gets lost and unloads there for the night. Either you can sulk in the corner and let the party pass you up, or you can get in there and fight for a piece of the action
Edit to Add: A crappy, frozen, fearful economy like the one we have today is more akin to the BD party where all the Hooters girls are already dating some other asshole, and they are just there for you to look at but not to touch.
Edit: This turned out to be anything but quick... first paragraph fixed and revised for honesty.