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Everything posted by y_feldblum

  1. probeson, Sensation is mechanistic. Photons impacting the cones or rods, atmosphere vibrating in a wave impacting the eardrums, etc. Perception is done automatically, that is to say, without the being in question having to will itself to perceive. In contrast, human beings have to will themselves in order to form concepts or otherwise to think; but human beings (among other species) perceive automatically, whether or not they will themselves to, simply by virtue of having skin, taste buds, eyes, ears, and noses, all connected to a brain. As DavidOdden and Grames indicate, "automatically" does not mean "uniformly." In fact, perception is learned. Human infants, like infants of other species, do not perceive immediately upon their birth. It takes some amount of time as they learn to perceive, as their brains learn automatically to integrate the sensory data into percepts, that is, into mental images or sounds. Additionally, perception is learned differently by different species and by different individuals within a species: for example, some humans are color-blind and see colors differently from other humans. Perception is an automatically learned system of integrating raw sensory data into mental images or sounds, which are uncategorized. That is, the identification of a given percept as a horse versus as a house versus as a cross of two lines versus as a star of four lines is identification, and this process rests above and is dependent on perception. Perception is, to the conscious mind, that which is given. To the conscious mind, percepts - mental images and sounds - are the raw stuff to be integrated into concepts. Perception is automatic, although not uniform, while conscious thought is not automatic and is as un-uniform as it gets. Nevertheless, sense-perception is infallible and concepts, properly formed, are objective. Cheers y_feldblum
  2. There is no such thing as "not enough gold." It's not as though we will die of starvation from "lack of enough gold to go around." As more people are born, the existing supply of gold will become spread more thinly across more people (as people trade with each other in gold). Prices will simply fall across the board as more people produce more things.
  3. That is correct. Paper dollars are inherently worthless. No-one would use them if they were not forced to.
  4. Unfortunately, while Karl Denninger's does make a few good points (there were many people who were gaming the system with other people's money, and they should be sent to jail), the rest of his commentaries don't stand up. Again, the debate over fractional-reserve banking assumes the context of a commodity money such as gold, so at this point the debate is mostly hypothetical. The real problem is fiat (fraudulent) money, and it has been my argument that all forms of fraudulent money are harmful, fractional-reserve commodity money included, and non-commodity included as well. All forms of fraudulent money are possible only by legislative or judicial fiat, not by the market nor by the judgment of self-interested individuals. The fact is, it is not even possible to deposit specie in the bank in exchange for a money-title note: it is not possible to put an ounce of gold in the bank and get back a banknote giving full right and title to that ounce of gold to whoever is the bearer of the note, and giving full right to redeem that ounce of gold on demand. Talking about fractional-reserve banking in the context of a non-commodity money simply makes no logical sense. (My prior discussions on the topic assume a commodity money.) Supposing we were on a commodity money, then the debate over fractional-reserve banking would become relevant. And here's the issue: two people lay claim to the same physical ounce of gold sitting in the bank's vault, and use their two separate claims to the same physical ounce of gold in their day-to-day dealings. Someone is getting screwed, because when that single physical ounce of gold is withdrawn and there isn't another ounce of gold to replace it, one of the claimants is going to be out one ounce of gold. Multiply this by an entire economy, and you've got yourself a cycle of booms and busts, and a government capitalizing on fear to grow itself exponentially.
  5. Note again that inflation is only a problem in a fiat money system, whether that is fractional-reserve commodity money or full-out fiat money. Inflation is not an issue under a free market system, because people will tend to gravitate to that commodity which has the best properties to be used as money. Something that is generally accepted in trade is money. That's what it means to be money. Barter is not money, but gold and whiskey are, when they are traded not for their own sake, but because they are generally accepted in trade.
  6. If you put your money in a bank, you can write checks against it. If you put your gold in a bank (back when we used gold as money), you can receive receipts for it which are as good as money. That is, until fractional-reserve banking enters the show. That's when things get more complicated. That's when you start writing checks against the same deposits that were loaned out in a sub-prime mortgage which the bank now hopes to collect at 50 cents on the dollar. That's also when the FDIC shuts your bank down (bank failures and FDIC takeovers). In a real-world economy, you would lose your deposits because the bank defrauded you, but of course in today's liquid world, the rest of America is paying for your and your bank's mistakes.
  7. The definition of displacement which I am using is (this is my own definition): displacement: n. the relationship between two points in space; the difference between two points in space; the vector from one point in space to another (mathematics, physics). See Wikipedia for confirmation of the use of the word in this manner. Note that the article uses the word displacement in the context of analyzing motion because the word is predominant in kinematics, the study of motion; however, the concept that the word signifies is not limited to kinematics but extends to all aspects of geometrical mathematics and physics, where it no longer carries the connotation of the motion of objects. Displacement does not mean distance traveled. It does not mean straight-line distance, either. It does not mean distance in any sense of the term. The reason is, distance is but one part of the entire relationship between two points in space, and displacement is the entire relationship between two points in space. Moreover, distance is not intrinsically a part of displacement, and in fact many branches of geometrical mathematics and physics deal with displacement which does not carry with it any conception of distance (a vector space without a metric). Motion is a form of action. Like all action, it is continuous, not discrete. That means, if an object is moving, then it is moving at every instant during the time period in which it is moving. Motion does not describe discrete observations of an object. It describes what the object is doing continuously, at every instant. We, as humans, only have the power to observe where an object is at discrete instants in time; we are unable to observe continuous motion. Before Isaac Newton, we did not even have the tools to understand continuous motion (thus Xeno's paradox). But Isaac Newton discovered a powerful tool to enable us to understand continuous motion based on our prior understanding of discrete observations: differentiation. Objects move continuously. We, given our limited powers of vision but our infinite powers of differentiation, proceed as follows. I know how to calculate an object's average velocity over a range of position and a range of time, given that I wrote down the initial conditions and the final conditions of my experiment. I have (xinitial, tinitial) and (xfinal, yfinal), so I calculate the average velocity over this range of position and range of time as (xfinal - xinitial) / (tfinal - xfinal). Given that I know how to perform this calculation with this formula, how do I use the same formula to calculate an objects precise position and velocity at any point in space or time? Isaac Newton introduced the rigorous mathematical technique of taking the limit, and showed how taking the limit is the answer to our question. Start with the formula for calculating average velocity given discrete initial and final observations, take the limit of this formula, and arrive at the formula for calculating exact velocity at any given position or time. Recall: objects move continuously, but we do not have the power directly to observe continuous motion. Instead, we observe motion discretely, and so must amplify our sensory powers with mathematical powers in order to have a more complete understanding of the world. Using the technique of taking the limit, we can abstract from the basic concept of average velocity, which is based on discrete initial and final observations, to arrive at instantaneous velocity, which is the objects actual velocity. Again, we cannot observe an object's actual motion directly, so we must use mathematical technique to amplify what powers of observation we do happen to have, and so we use mathematics to go from average velocity to instantaneous velocity in a completely rigorous way. (Obviously, I have left out the definitions of limit and left out all use of the term differentiation, because these have appeared in previous posts in this topic.)
  8. Yes, that would be the correct complaint against fractional-reserve notes. Banks typically tend to tell their customers that demand deposits are safe. But according to you, banks should actually be warning their customers that demand deposits will mostly be safe, for most people, for the next couple years - until the current economic boom (caused by credit expansion, itself caused by fractional-reserve banking) ends with a bust, and all the bank' customers attempt to withdraw their deposits and the banks are forced to liquidate, at which point the banks' customers' accounts will be proven to be what they actually are: not money. In fact, banks actually do slap something of a warning label on their demand deposit accounts. The warning label reads: "FDIC Insured." Banks and their customers, however, tend to treat this as a stamp of Federal approval. What it really means, though, is that the government explicitly and inappropriately grants protection to a widespread and virulent fraud. As Gresham's Law states, "bad money drives out good." Fractional-reserve notes are bad money, and their prevalence and the protection they enjoy are destroying the country's money and, ultimately - as we see all around us this past year -, its economy, its liberty, and its people.
  9. Inflation tends to be a phenomenon of fiat money, not of a fully-backed commodity money, because a commodity with unstable value would not come to be used as money, and if it did come to be used as money, people would tend to switch to a more stable commodity to use as money. It is true that vast sources of additional commodity (the same commodity as that currently in use as money) may be found and thus the relative value of a unit of that commodity will fall. But one of the characteristics of a commodity which makes that commodity good for use as money is that it is difficult to find and produce that commodity. Thus, if a commodity is in use as money, then it will have been seen to be hard to find and produce relative to all other commodities which could also be used as money. Moreover, if new sources of a commodity currently in use as money are found and the relative value of a unit of that commodity falls, people will tend to judge other commodities as better for use as money - no-one is locked in to use a commodity with an unstable value as money.
  10. A vector space is indeed a vector space over a field, and that field is the Scalars with respect to that vector space. However, vectors do not have any intrinsic notion of magnitude. Some vector spaces are metric vector spaces, in that there is an additional notion of a metric, which includes the notion of magnitude of a vector. One needs to come up with a metric over the vector space of displacements in order to define what distance means (distance, a scalar, is defined to be the magnitude of displacement, a vector). Sample formulas: The distance from location p to location q is |p - q|2 = g(p - q, p - q), where g is the metric. In Newtonian mechanics, the metric g(u, v) = uxvx + uyvy + uzvz. In Special Relativity, the metric g(u, v) = utvt - uxvx - uyvy - uzvz. As you can see, magnitude is defined as the square root of the metric applied to the same vector twice, and distance is the square root of the metric applied to the same displacement twice. But different metrics hold in different contexts, and are not embedded within the vectors themselves. Special Relativity will give different answers for "distance", but will give identical answers for "displacement".
  11. Correct. None of the coordinates need be distance. The concept of a vector space precedes the concept of a metric over that vector space (a metric is a particular function Vector X Vector --> Scalar which defines distance for that vector space). Vectors do not have distance in and of themselves; a vector v only has a distance in the context of a metric m, and that distance is defined to be m(v, v). Displacement is a vector. Displacement is, in Newtonian physics, space-relative. In Special Relativity, it is spacetime-relative.
  12. Isaac Newton has already done this, with the invention of the differential calculus, with his application of the differential calculus to problems in physics, and with his systematization of the physics of his era under just a few abstractions. I refer you to his definition. Location is not a set of distances. Location has a very precise mathematical meaning, and from high school geometry through theoretical astrophysics, location precedes distance. Moreover, displacement (relative location) precedes distance as well. Nevertheless, "absolute location" - that is, the notion that the universe itself is unmoving and has a center, and that the locations and velocities of other objects are to be defined in terms of their locations relative to the position and velocity of the universe itself - is a faulty concept, even though the general way we think about locations and velocities are as relative to the center (or surface) and motion of the Earth. This illustration is wrong-headed and, to a physicist, impossible to imagine. Not because this is practically impossible, but because the concept "freezing the universe" doesn't make snese, and "displacement from an entity to every other entity" doesn't make sense when one takes into account Special Relativity. That's not what motion is. It is merely how we observe it. Objects move in and of themselves, whether or not there is anyone to pick out what positions they happen to occupy at any particular pair of times. And since your understanding of motion is wrong, your objection to "instantaneous motion" falls apart. And a wrong one, betraying a fundamentally misguided understanding of the calculus. The method of calculating instantaneous velocity does not determine what instantaneous velocity is. We calculate instantaneous an object's velocity based on observing what an object's location is at various points in time, because that is the method of calculation that our brains are equipped to handle.
  13. You missed the meaning of my statement, entirely. The meaning was: "location" cannot in an absolute sense be defined. The word has no meaning. The word certainly has meaning when describing the displacement of one entity with respect to another entity. They move with respect to other objects, whether or not anyone is looking. Likewise, they do not move with respect to absolute stillness, whether or not anyone is looking, because there is no such state as absolute stillness. Shape is a primary of sense-perception. Location with respect to oneself is also a primary of sense-perception. But location in an absolute sense is not. You cannot observe location in an absolute sense. You have no way to define it. The entirety of the field of physics has no way to define it. Newtonian physics rests on the demolition of the idea of absolute location. That is not the meaning of "absolute location." The concept of "absolute location" rests upon the concept of some primary entity which is by its nature absolutely still. Distance, and distance-traveled are identical in meaning, when the journey is along a geodesic (which, in a non-curved space, is a straight line). A photon travels along a geodesic. In fact, relativity argues that all objects not under the influence of a force (where gravity is not a force) travel along geodesics and cannot do otherwise, light included.
  14. Every object is at all locations, all the time. Because location is not absolute. You need to invoke reference frames in order to measure an object's position with respect to your own or with respect to another object's position. The same applies to velocity. You don't have to take my word for it. Feel free to attempt to discover your own absolute location or velocity (not your location or velocity with respect to the planet Earth, but with respect to the entirety of the universe). You may make use of anything you wish, including scientific instruments and scientific books. But you will never succeed, because success is outside of the realm of possibility. As Newton and Einstein observed in different contexts, it is impossible to set up a scientific experiment which will permit one to discover his own absolute location or his own absolute motion.
  15. Demonstrably false - at least in the way you meant the sentence. It is not possible for anyone to attempt to discover his own location or his own velocity, let alone the position or velocity of anything else. The reason for this is: there is no such thing as "absolute position" or "absolute velocity." They do not exist. As things which do not exist, they are not available to observation. This statement is an integration from all of the facts we know about the universe - not a single one of which implies the possibility of discovering a body's "absolute position" or "absolute velocity" (and many of which imply their nonexistence). All that is open to a person is to calculate his own position and velocity with respect to a second "reference" body (such as the Earth) and then to calculate the position and velocity of another object with respect to his own position and velocity or with respect to those of the "reference" body. Thus, "rest frames" and "coordinate systems."
  16. An Austrian economist's view on the practice of fractional reserve banking. J. G. Hulsmann - Has Fractional-Reserve Banking Really Passed the Market Test?
  17. In other words, there is no such thing as "motionless." There is no such thing as "true position, in the absolute sense" - or "true velocity, in the absolute sense." One can observe locations and velocities relative to his own, but he cannot ascertain the "true" positions or velocities of either other objects or himself, because there is no such thing.
  18. The bank has knowingly and intentionally put itself into a situation where it will have to default on its liabilities to its depositors.
  19. The words "instantaneous velocity" are the best, most precise words, and they fully, accurately and correctly capture the intended qualitative meaning. A meaning built up inductively, not brought down to earth rationalistically. The words "instantaneous velocity" are fully intended to convey the opposite meaning of "average velocity." The instantaneous velocity of an object is, for some particular moment in time, the exact velocity of that object at that exact instant in time. Isaac Newton figured out how to define it and calculate it with impeccable precision.
  20. @agrippa1: - The parent bank with the warehouse and the child bank with the cash counter are the same entity. That is what I meant by "they are the same entity." - The common characteristic between warehousing and lending depositors' money is: is the money physically sitting at the same counter where the money was deposited? This common characteristic is irrelevant. The relevant characteristic, which is where the two phenomena differ, is: is the bank liquid enough to return all money held in demand deposit accounts to the depositors at any time? - The contract government demand deposit accounts specifies an amount of time which the bank has to available to it to return the depositor's money to him. Something like "within two business days." This cannot include "whenever John pays back his loan." - Pooling deposits does not make a bank illiquid. Loaning out deposits does make it illiquid, in that its depositors will not be able to cash out at any time for the full amount of money deposited. - Gold coined as currency (on an actual gold standard) and gold bullion are of the same character when it comes to their qualifications to be usable as money, except for ease of carrying in one's pocket. Coined gold is not any more monetary than uncoined gold bullion. Gold is gold, and is measured in gold ounces, whether it has a pretty stamp on it or not. Again, what kind of gold standard are you talking about, when gold both is and isn't money? - The bank may certainly exchange its depositors' coins for bullion for warehousing, and exchange the bullion for coins when the depositor wants to withdraw his money. That just changes the form of the money, not the kind or quality.
  21. @Software Nerd: I have no problem with banks lending. They should simply not be doing it out of demand deposit accounts. They can lend out of CD's, and they can even set up an investments department that lends out of funds which customers deposit to be invested. However, CD's and investment accounts are not demand deposits - they are not guaranteed to be safe or to represent the deposits. When banks permit both borrowers and depositors to use the same deposited funds, that's when the problems start. This scheme cannot work. If this scheme is widespread, the only result can be a banking panic and an economic collapse. Inflation has a tendency not to remain stable. It tends to accelerate as a bubble, until it is stopped. When it is stopped, a correction or a bust sets in. Fractional-reserve banking, like any kind of inflation, is not stable, and engenders booms and busts just like any other kind of credit expansion. @John McVey: The fraud is in permitting depositors to treat their deposits as though they were as good as the money deposited, when in fact the deposits are not as good as the money deposited. The money deposited is not in the bank and cannot be withdrawn at will - it can only be withdrawn in "mild" economic seas, which are sure to turn choppy and get worse from there. So long as depositors in a demand deposit account are prevented from treating the account as a demand deposit account, by contract - by embedding a clause to the effect that the bank is permitted to renege on its obligation to return all the depositor's deposits to him - there is no fraud. Because, sans Federal bailouts, the bank will renege on its obligations.
  22. The depositor agrees to the contract he signed, which he can attempt to enforce in court. It is, of course, his money which is held in reserves, while it is others' money which is loaned out. Many depositors are under the illusion that the bank can safely invest the deposits and remain solvent over the long term, while at the same time providing on-demand access to the deposits. They are mistaken. Banks can do so over the short term, and then after the impending economic collapse and the destruction of the current banks, the next generation of banks will also be able to do so over the short term. Many savvy investors invested with Bernard Madoff in a scheme which they knew was too good to be true (they didn't know what the scheme was). Fractional-reserve banking is also too good to be true.
  23. This - proof by principle - seems like rationalism. Properly, one demonstrates a proposition like this both by looking to the principles one already knows as well as to the concrete details of the proposition, to its causes and its effects. I make two points: First, that a fractional-reserve bank offering demand deposits makes its depositors a guarantee that the bank cannot keep, and - as a form of breach of contract, practiced on the widest of scales - such a practice must inevitably come crashing down. Lies multiply and frauds multiply, until they build up to a point where they can multiply no further. Then they come crashing down. The principle is: the virtue of honesty, and the impossibility of long-term dishonesty. Second, this practice has in the past come crashing down every time it has been tried, perhaps most notoriously the banking and economic collapse of 1929. Since then, we have seen much less of a collapse in this particular form of credit expansion, because the US government has severed cause and effect by actively shifting the risk and punishment inherent in fractional-reserve banking onto other parts of the economy. Correct, in that the specified terms in the contracts have not in themselves been breached. However, the bank has rendered itself impotent to honor its contracts in any except the most mild of economic circumstances. The moment 11% of its depositors wish to switch to another bank (supposing a 10% reserve), the bank is rendered broke. Furthermore, since fractional-reserve banking is a particular form of fiat money, the inflation is unsustainable and the fiat money will be destroyed. This happened in 1929, and the rapid destruction of fiat money of a different form is currently happening in 2009. I would consider it to be fraud knowingly to put oneself in a circumstance where one will be forced to breach contract. This is what fractional-reserve banks do. The fiat money will be destroyed, because nature abhors a lie (especially a nationwide lie), and the moment the banking panic sets in, the fractional-reserve banks will have destroyed the life savings of 90% of their depositors. One can look at fractional-reserve banking in two ways: as credit expansion, and as false fiat banknotes. As credit expansion: The loans which the bank originate with its depositors' money become a part of the money supply and represent new and additional money, because the borrower has physical possession of the money, while at the same time the depositor also has full right to physical possession of the money, and can exchange this right (in the form of a claim against a deposit) in daily economic activity. As fiat banknotes: the actual money was loaned out, and now another person is trading with it. However, now the depositor is trading with a claim against that very same money, when he is not in possession of it. Most of the deposits can and will be destroyed the moment the fractional-reserve bubble bursts. Fractional-reserve banking creates new loans, a form of money, where they could not otherwise have been created. However, since it is not the debt instruments which are traded, it is not the debt instruments which are destroyed when the bubble bursts and inflation is forcibly reversed. It is the deposits which are destroyed, and therefore the deposits can be seen as the false money as well. The loans are new and additional money, while the deposits are destructible money. (In the present economic collapse, the government protects deposits from their impending destruction, while trillions of dollars' worth of securitized debt instruments have been destroyed.) Whichever way one looks at it, the only answer is a private, fully-backed commodity money system.
  24. They are the same entity. Warehousing the depositor's money is not the same as lending it out, because the bank can always recover the deposits of every depositor at any time, within the time it takes to transport the money from the warehouse to the counter. The bank remains fully liquid the whole time. When the bank lends out its depositors' money, the bank becomes highly illiquid and must hope against hope that not too many depositors at any time want access to their deposits, for fear of going bankrupt. What gold standard are you talking about? Is gold money or isn't it? The rest of this example seems not to make sense, because you are talking about gold as if it were not the actual money deposited at the bank.
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