Why even bother ArturiusX? These people who are expecting doom will disappear in a year or two when we enter a new boom. They'll be buying at the next all time high again, after they sold their shelters, gold stashes and canned food.

The forum thanks you for your contribution. Perhaps you could now elaborate on your previous example and tell us what the correct level of money in an economy is.

He already indicated that it's $10 per person. I say print a new $10 every time someone is born, and burn one every time some dies. Or, alternatively, murder someone every time someone is born. Whatever keeps the money supply at the right level.

Not sure if you're just trolling the Austrian or if you really believe this, but I don't think inflation is the driving force behind valuable investment. People allocate capital because they intend to consume it in the future, and they lend out that capital because they are promised a return on capital if they lend it out (rather than keep it inside a mattress, for example). Now, that return on capital they get comes from a slice of the value of the additional economic value that is created by the person who borrows it. It is true that people will keep money inside a mattress if they can't find people to lend the money to who can generate additional economic value with it and cut them a slice of the profits, but when this happens it doesn't necessarily follow that you should punish the savers with inflation to "encourage" them to invest it. All that happens (from an investment standpoint) is that entrepreneurs must now find ideas that earn a return in excess of inflation sufficient to give a cut to the investors. Nothing really changes in the investment decision area, except that when the money supply is grown it is not distributed evenly to everyone who holds money, so those who get the new money first get a windfall profit without generating any economic value. This is identical to just sending armed men to take a portion of each saver's money every day that they don't lend it to someone else, and hand it over to someone else who will "use it better". It's nice to dress this up as being "good for the economy", but it's really only good for the economy of those that get the new money first.

Oh, I'm not saying its fair. But it works. Human psychology is way way way more important than the money supply, which is why Keynes's ideas expressed as exuberance etc as a way of defining demand thus defining inflation works in real world much better.

Its not perfect, and perhaps some more Austrian thinking is needed during times like these, but to abandon something that has given us everything in the past 70 years and seems to do a pretty good job of knowing whats going on is silly.

Supply side economics just doesn't accurately reflect whats going on. Remember, its all to do how people think anyway, so figure that out and you've figured out economics.

Why should I? All I had to do was give an example where inflation is good. I did that.

Also, it's impossible to answer your question anyway. It's an ill-formed question.

Not really, you just asserted that the money supply would be "insufficient" for the greater population and therefore inflation was needed. You just assumed your conclusion.

Actually, it's not assumed, I just thought most people had the half a brain cell required to see that that was my conclusion.

Interesting. If it's impossible to answer, how can you assert that more is needed?

You asked the 'right' amount...that's impossible to answer. The question of more/less is tractable, so I gave you a case where more is needed. There's no "right" amount because that's relative to whatever metric you choose, and there are different acceptable metrics.

No, you gave a case where you claimed more is needed and then acted like it was self evident. It's not the same thing.

What makes you understand things better than Schiff or a Jim Rogers.

just curious what makes you feel your more right than they are.

To be fair to those who "aren't buying what Schiff is selling", Schiff's line is different from the "conventional wisdom" on the subject. Typically people demand evidence that the unconvential point of view is the correct one, and when looking at performance-to-date this year it doesn't look like the recommended actions that Schiff would have had us take would have helped.

What are you talking about? Those guys are traders, they see an event, they make a play on it. In this thread, we're talking about a theory of economics, and which one promotes the most growth within an economy.

Those guys don't really give 2 ****s about which one is better, they trade the underlying price movements. Keynsian economics goes through hiccups, and Austrian thinkers can use their theories to make money. I never discounted these methods, money supply and resource controlled growth with an emphasis on fair price is important. But what people are thinking is also important.

The funny part is, as all of us winning traders know, you can be wrong about something but still make money. Thats what makes you a good trader, and thats why in any market environment, me, Schiff and Rogers will profit. In 10 years time, all of us will have more capital than we did today. But as for the rest of this board blindly following an appeal to authority philosophy that says to go long and stay long in gold no matter what.... good luck guys.

I want to thank Glenn Beck for this cartoon

It's gotten me to watch some old Duck Tales cartoons the last few days--- damn that show was good