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Everything posted by OhReally

  1. Package dealing is one of the things that I am arguing against. I believe that the current thinking on inflation is mistaken or evasive because it lumps together superficial characteristics of 1) economic condition and 2) resulting from increases in ratio of currency to goods and/or services. These statements about inflation are true; it is an economic condition and it affects an arithmetic ratio. But these are not fundamental and therefore wrong as a definition. The question is how. How do people go about changing the amount of money in society? In this case, how is the supply increased? The broadest answer is rationally or irrationally. I argue that Inflation falls to the later; it is irrational and specifically so because it violates property rights by counterfeiting currency which increases its supply. Money, money substitutes and the process by which both are brought into existence is sufficient context to answer the question. As to your example of natural disasters, they do cause a want of goods and this lack does influence their prices, but this is an instance not of inflation but the law of supply and demand. Your use of non-essentials in defining inflation gives rise to an error of classifying the effects of natural disasters as inflationary and distracts attention from the fundamental question of how people increase the supply of money and money substitutes.
  2. Yes and no. But it is accurate to state that many of the attributes of our nature are vitality directed or goal directed as O'ists would say. These happen automatically like the beating of one's heart or the grumblings of one's stomach. Selfishness is rooted in choice as in to be selfish or to be altruistic. Our biological makeup continually thrusts to be alive. The choice is what to do about it.
  3. Let me change the context completely by asking that you consider a brand new country whose politics and ethics are Objectivist, pure and simple. I have two scenarios to ask you about. Here's the first and I'll follow up with the second one, later. Say that in this first scenario you open a fractional reserve bank (FRB) without financial capital; you had enough capital to build your brick-and-mortar Bank and have enough left over to finance its daily operating expenses for a healthy period of time but you don't have any financial capital beyond that to use in lending. I am only saying this in order to keep this part of your ledger at zero. Say its your first day in business in our brand new Objectivist Country and say that I am your first customer. I want to deposit my money into your Bank but I want retain ownership of it. I am looking to you provide me not only safe keeping of my money but also a process whereby you manage settling my account as I draw down on it with the expenditures I make using your checks. You and I agree to the services fees that you'll charge me. I also sign an agreement with you acknowledging that you are a FRB so I understand the risks that now or in the future you may not have my money on hand if I demand to cash out my account and I also understand that you may make loans without sufficient money backing them. I go ahead and make my demand deposit of say 100 ounces of gold. But suppose that before leaving your Bank with my 100-ounce-check-book in hand, I turn to you and ask for a loan. I want to borrow 100 ounces of gold and can secure the loan with a small rental property that I own; I will repay you in 5-years time with interest. You determine that I am good for it. I know and you know that you have only 100 ounces of gold in your vault but you say, "No problem because I am a FRB. But to be safe, I'll hold title to your rental property and only lend you 90 ounces of gold by simply crediting your checking account with it." My question about this scenario is this. Wouldn't you and I both be committing fraud? Even though you haven't misrepresented yourself and we agreed to the transaction, you gave me title via your fiduciary media to 90 new ounces of gold which doesn't exist. You're going to claim that I am obligated to repay you (with interest) on money you didn't have to begin with and.I am going to use your fiduciary media as a money substitute to buy real goods and services from others I'm dealing with. Doesn't this first scenario smack of having your cake and eating it too?
  4. My Dad used to sum up the dealings my siblings, me and friends had with each other by saying, "Anything shiny, anything sweet". By around the same age as the 5-year old you cite, my siblings and I would trade things with each other and our friends. If we couldn't find a way to make the trade directly, we scrambled for something that would be acceptable. We hadn't conceptualized the double coincidence of wants to any greater depth but we solved it on the spot by saying, "Well if you don't want this, then how about this over here." With that, we discovered the value of bubble gum, Life Saver Mints, particular types of sea shells and beads that were yet to be threaded into necklaces. We used all these as money. For example, I bought a test tube from my oldest Brother with three pieces of Bazooka Bubble Gum. I knew that he didn't want the test tube any longer. So instead of five pieces that he asked for, he settled on three. My Sisters and her friends loved making beaded necklaces. One of them bought a doll from a friend with a handful of red and green beads. All of us really enjoyed making houses and forts from Popsicle sticks and glue. When a friend showed up with a small bag of the sticks, we were all eager to trade with him. He bought a whole bunch of things from us that day using his sticks as money, which was perfectly acceptable to us. And to our young minds, he had a remarkably new idea. I can remember hanging out in our tree fort with friends. One of them asked out loud something to the effect, "We use bubble gum to buy things. But what did kids use before bubble gum was made?" My younger Brother piped up, "They used dimes made of silver. My Dad still has a whole bunch of them." And I said, "But they don't use those anymore though. My Dad collects them and puts them into books." I know that I haven't gone back into history to answer your question in terms a 5-year old could understand. My thoughts on history back then came from picture books, stories we were told and shows on TV. They were all very cool. But what was cooler at the time was anything shiny or anything sweet.
  5. Nicky: I thank you for your reply and insights into Paypal. I am curious about it because I don't understand why you used Paypal to exemplify the service I've described. As I understand them, Paypal provides payment services and bases them on a credit card that its customer has with another institution. I also understand that they provide transfer services by acting as their customer's authorized intermediary transferring his money from his Bank to another party. Like a depository, Paypal provides these services. But unlike a depository, Paypal does not safekeep its customer's money. I described a private institution honoring a contract by holding money for safekeeping on their prem and making it available on demand to a holder of their note. Security and redemption which are heightened electronically are further applications of the idea covered in my posing the hypothetical case. They underscore the primary need a customer has to contract with the depository. In particular to this part of our thread, I was interested in discussing the historical origins of paper currency using the hypothetical case of the Bank. I haven't had the time to study the history of Banking. softwareNerd has recommended several books on it. I've started with one of them, the history of the Bank of England. In the meantime, I am looking at banking and discussing it here from the perspective of common sense and more so by what I would find valuable in a bank. From that, it made sense to me that paper currency may have evolved starting this way. Anyway, back to the hypothetical Bank depository. I'd like to discuss a more important question, namely, who owns what and why? From my perspective, if anyone enters into a money-contract of bailment with this Bank, then ownership is retained by the bailee not the Bank. At least in my hypothetical, I own 100% of my money and the money is available to me immediately upon my demand. But if I step outside the case, common sense says otherwise. People have said that once deposited, the deposit becomes property of the Bank and is treated not as a deposit but as a time deposit, a loan to the Bank. I mentioned that I am reading about the history of banking. I am looking to learn whether a depositor always gave up his right to the immediate availability of his property when dealing with a bank. I suspect that he didn't. But is there somewhere in the history of banking when he was forced to and today, we are still living with that legacy? .
  6. Nicky: Assume the case of a private financial institution in a free society. For ease of discussion, let me say that the institution is a Bank but it is only a depository who has elected by its published charter never to make loans but instead only accepts money deposited by its customers. (It's source of revenue then is limited to the fees it can command for the storage and safekeeping of its customers' money, along with other fees for such services as transfer and account openings and renewals.) So, the Bank will provide utmost safety of the deposited money. Upon demand by a note holder, the Bank immediately gives the money. Regarding the origin of paper currency in this society, I have a question. You mentioned in your reply the contrast between government imposed currency and "the money issued by a private institution". In the case that I am presenting for discussion, isn't it a fact that the Bank isn't issuing currency whatsoever but merely giving its depositor a note certifying and guaranteeing the full safety and redeemability of deposited money? The note holder then carries with him the paper note just (nearly) as good as the vaulted money and (over time) can demonstrate this fact with those he does business with. By virtue of its use outside the Bank, the note does become a currency based on the common knowledge that it is immediately convertible into the money held safely and readily available at the Bank. In other words, isn't it the note holders not the Bank who discover (rather quickly) the value and acceptability of using the note as money?
  7. sN: Thank you for the link to "bailment". I see there that deposit is listed as a type of bailment. Also I want to clarify one point under my above proposed deposit contract with you (my hypothetical Banker), The point is that I am not looking to loan you my money (that would be a different contract between you and me) but I am looking to make transactions easier and safer for me with a money substitute and to extend the same ease and security to any holder of your note. WIth that, any note holder presenting your note back to you can demand possession and ownership of the coin represented by the note. Or they may elect to start their own account with you under the auspices of their own deposit contract whereby they are the new owner of the coin and have your note to show for it. And thank you for the book recommendations and the links to them. These could be helpful in satisfying my curiosity. I think that the mere deposit of money into a bank shouldn't change ownership of the deposit. However, because it does, I'll be looking into the tradition of banking to learn whether it has always been that way and if not, then why it changed. Thanks again.
  8. sN: Thank you for your insights. Suppose again in a free market, you are the Banker and I have the money. Say instead of those 100 Eagles, I have 100,000 of them and I propose to you to start a new tradition in your Bank. Instead of loaning you my coin as your creditor, I want you to safely keep my property, the Eagles, not in safety deposit boxes but in your vault. I want you to give me denominations of notes, each denomination equal to the same number of coins and redeemable in Eagles upon my demand. I want you to honor redeeming your notes on demand not only for me but for any note holder who presents them to you. Also, I want to retain title to my unredeemed coin that I have on balance with you. And finally, I want you to keep my balance of coin fully on hand in your vault and insured by a reputable private insurer. Of course, I agree to pay for your services with some agreed upon percentage of my account balance. Would you consider my proposition good business for you? Would you be concerned that there may be any Court in our free society who wouldn't recognize our deposit contract? PS: Would you have a recommendation of reliable histories on money and banking? One of the reasons I am asking is because I did not know that I am consider a creditor of my Bank. I always thought that I was the owner of my demand deposit. I am curious to learn whether the banking tradition you mentioned in your reply above (about ownership) is recent to modern banking our goes further back into the history of banking.
  9. SN: Thank you for your reply. Before you say more, I have a question about ownership. Let's assume a free market. Say that you're my fractional reserve banker and I deposit 100 gold Eagle coins at your bank. You and I agree that the coins are not to be kept 100% in reserve by you as my bailee. You give me 100 notes, each note guaranteeing the holder of the note one gold Eagle upon its presentation to you. My question is who owns the coins? You the fractional reserve banker or the note holder(s)?
  10. Regarding your text that I highlighted in bold, I understand it. A Bank accounts for its Customer's deposit of money, elects to keep some of it in reserve at the Bank and lends out the rest of it. Here, real money comes into the Bank and a part of the real money is being lent out by the Bank. But I am unclear about the rest of your thoughts because you say that the money lent by the Bank and "the steady value that comes from other people providing layers of guarantee gives it [the loan of real money?] "money-like" characteristics, where other people are willing to accept bank-notes as near money." I am confused in that I don't know what you have in mind. Has the Bank lent part of its Customer's Account or not? Isn't the part of the Customer's Account being lent the real money? If so, then how does it now have characteristics other than real money? If the Bank lends a note instead of real money, isn't the real money still in the vault of the Bank? And isn't the face value on the lent note the exact quantity of real money being lent?
  11. I find another Bank to do business with. But would you consider doing business with such a Bank that makes your demand deposit fully available to you but (by agreement between the two of you) loans out part of your deposit?
  12. Harrison: As a form of money what economic good would you chose to represent the creation of some real value? Thoughts?
  13. As to agreed-upon procedure between me and the Bank, are you referring to something like these? I deposit my money in a demand account with the expectation and agreement with the Bank that all of my deposit is available on demand to me and only me and can't be lent out to others. On the other hand, I deposit my money for the long term and receive say a CD from the Bank and by agreement between me and the Bank, the Bank can lend out my deposit? Or are you referring to some other types of agreement?
  14. Nicky: Regarding your statement about financial institutions issuing their own currency, are you referring to their issuing money substitutes like notes, check deposits, CDs, credit cards and the like?
  15. Yes, I am focusing on what fundamentally explains inflation. As I've been thinking about it, I think that it is a form of violating property rights, in particular by forcing an increase in the supply of money.
  16. When discussing money, isn't it correct to say, "Money is (or should be) a form of property obtained by an individual for the purpose of exchange and as a store of value."? Isn't money private property and once in possession of this kind of property, anyone can buy anything, anywhere as long as there is someone on the other side of the exchange who is willing to accept the buyer's property, the buyer's money? And like any property, shouldn't the individual protect it from being taken? Within the context of the proper function of government, shouldn't government enforce this protection? I am asking these questions because I've been sketching out the fundamental characteristics of inflation with an eye toward defining the concept. I am thinking that instances of violation of property rights serves as the CCD. As to isolating the units of the concept, I am thinking that what distinguishes these from other types of violations of property rights is that these are forcible ways to increase the supply of money by means of counterfeiting the supply of money, whether through criminal or legalized activities. From that, I wrote the following definition of the concept. Definition: Inflation is a violation of property rights by forcing increases to the supply of money by private or legalized counterfeiting. With that, I welcome your comments and suggestions.
  17. In characterizing money, some people point to a medium of exchange and a store of value as defining. But, an even more important characteristic of the concept is private property. Money is private property; it has to be because property rests on the more fundamental identification that "every man is the owner of his mind and his effort". (FTNI pg 89.) Money as private property was replaced by force of law. In looking at your posts on the issue, I still don't understand you. How could this immorality be "okay" with you and of less priority to you for political change?
  18. The White House issued a press release of the text of that speech in mid July 2012. In the campaign speech, O'Bama states his view of morality. He starts by emphasizing the means, names values and their beneficiaries, and completes his view of morality by stating the ultimate value and beneficiary. He starts by saying, "..., at the heart of this country, its central idea is the idea that in this country, if you’re willing to work hard, if you’re willing to take responsibility, you can make it if you try." After his emphasis on hard work, O'Bama goes on to list values and their beneficiaries by saying, "That you can find a job that supports a family and find a home you can make your own; that you won’t go bankrupt when you get sick. That maybe you can take a little vacation with your family once in a while -- nothing fancy, but just time to spend with those you love. Maybe see the country a little bit, ... That your kids can get a great education, and if they’re willing to work hard, then they can achieve things that you wouldn’t have even imagined achieving. And then you can maybe retire with some dignity and some respect,..." For his finale, O'Bama ends his list with the purpose of his morality, by saying, "be part of a community and give something back [to the community]." ... "That’s the idea of America. ... That’s what binds us all together." From the context of his morality, O'Bama lays down the role of government. "Our goal isn’t just to put people back to work -- although that’s priority number one -- it is to build an economy where that work pays off. An economy where everyone, whether you are starting a business or punching a clock, can see your hard work and responsibility rewarded." Later in the speech, he describes the political process among the Parties, a process in which all parties share the basic political principle but differs in the means to implement it. He says, "..., they’ve got a basic theory about how you grow the economy." and "I’ve got a different view." Within the context of his morality and politics, he's being consistent when he says, "If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business -- you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet." He concludes his basic ideas about both by saying, "The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires." "So we say to ourselves, ever since the founding of this country, you know what, there are some things we do better together. That’s how we funded the GI Bill. That’s how we created the middle class. That’s how we built the Golden Gate Bridge or the Hoover Dam. That’s how we invented the Internet. That’s how we sent a man to the moon. We rise or fall together as one nation and as one people, and that’s the reason I’m running for President -- because I still believe in that idea. You’re not on your own, we’re in this together." According to O'Bama (and to what he says about the views of his adversaries), the role of government is to build an economy. The question his Party faces is how to do it. He says, "So all these issues go back to that first campaign that I talked about, because everything has to do with how do we help middle-class families, working people, strivers, doers -- how do we help them succeed living their lives? How do we make sure that their hard work pays off? That’s what I've been thinking about the entire time I've been President." I am summarizing his speech this way. You citizens won't be living a fanciful life but you will be working hard, spending a little time with your loved ones and dying with some dignity and respect. More importantly as you live, you'll be giving back to the community. We, the Government, will make sure that there is a community to give back to. Toward that end, the government will grow the economy. You will participate in the economy by working hard and being innovative. Also, you will have a political say in this; all that you have to decide by your vote is which Party can best grow the economy. From time to time, you might take pride in your accomplishments. However, you really shouldn't because if it wasn't for others and the government, you never could have done anything. I believe that O'Bama's fundamental error has to be that he has no grasp on the nature of man. Instead, he has reified the community and serves this entity through his statist politics.
  19. Money is any property of an individual that is voluntarily accepted by others as a medium of exchange among themselves.
  20. "Critical" Thinking Woman: Do you drink beer? Man: Yes Woman: How many beers a day? Man: Usually about 3 Woman: How much do you pay per beer? Man: $5.00 which includes a tip Woman: And how long have you been drinking? Man: About 20 years, I suppose Woman: So a beer costs $5 and you have 3 beers a day which puts your spending each month at $450. In one year, it would be approximately $5400 …correct? Man: Correct Woman: If in 1 year you spend $5400, not accounting for inflation, the past 20 years puts your spending at $108,000, correct? Man: Correct Woman: Do you know that if you didn't drink so much beer, that money could have been put in a step-up interest savings account and after accounting for compound interest for the past 20 years, you could have now bought a Ferrari? Man: Do you drink beer? Woman: No Man: Where's your Ferrari?
  21. From Counting Crows to Talking Crows – an interesting advance in their "Bostonian" Crow Epistemology Researchers for the Massachusetts Turnpike Authority found over 200 dead crows near greater Boston recently, and there was concern that they may have died from avian flu. A bird pathologist examined the remains of all the crows, and, to everyone's relief, confirmed the problem was definitely not avian flu. The cause of death appeared to be vehicular impacts. However, during the detailed analysis it was noted that varying colors of paints appeared on the bird's beaks and claws. By analyzing these paint residues it was determined that 98% of the crows had been killed by impact with trucks, while only 2% were killed by an impact with a car. MTA then hired an ornithological behaviorist to determine if there was a cause for the disproportionate percentages of truck kills versus car kills. The ornithological behaviorist very quickly concluded the cause: When crows eat road kill, they always have a lookout crow in a nearby tree to warn of impending danger. They discovered that while all the lookout crows could shout "Cah", not a single one could shout "Truck."
  22. 23. Two Eskimos sitting in a kayak were chilly so they lit a fire in the craft. Unsurprisingly it sank, proving once again that you can't have your kayak and heat it too.
  23. Atheism is a non-prophet organization.
  24. The Importance of Following Directions Sir, she said ' You may use the ladies room if you promise not to touch any of the buttons on the wall.' He did what he needed to, and as he sat there he noticed the buttons he had promised not to touch. Each button was identified by letters: WW , WA , PP, and a red one labeled ATR. Who would know if he touched them? He couldn't resist. He pushed WW. Warm water was sprayed gently upon his bottom. What a nice feeling, he thought. Men's restrooms don't have nice things like this. Anticipating greater pleasure, he pushed the WA button. Warm air replaced the warm water, gently drying his underside. When this stopped, he pushed the PP button. A large powder puff caressed his bottom adding a fragile scent of spring flower to this unbelievable pleasure. The ladies restroom was more than a restroom, it is tender loving pleasure. When the powder puff completed its pleasure, he couldn't wait to push the ATR button which he knew would be supreme ecstasy. Next thing he knew he opened his eyes, he was in a hospital bed, and a nurse was staring down at him. 'What happened?' he exclaimed. The last thing I remember was pushing the ATR button. 'The button ATR is an Automatic Tampon Remover. Your penis is under your pillow.'
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