The Inescapable Math That Dooms Our System

[Alpo]

Sorry. The link to wiki was broken. It is now fixed.

An Econ 101 discussion of fiat vs commodity currencies and debt can't be adequately summarized, much less solved, in a forum such as this. There are 1000's of economists generating billions of pages of reports supporting various positions. The best that can be said here is that you appear to hold beliefs consistent with one school of economics. I hold with another.

 

[jamil]

I think you guys are missing the most important points made in this discussion...

Yeah...She's great....

 

[dusty88]

Sorry. The link to wiki was broken. It is now fixed.

An Econ 101 discussion of fiat vs commodity currencies and debt can't be adequately summarized, much less solved, in a forum such as this. There are 1000's of economists generating billions of pages of reports supporting various positions. The best that can be said here is that you appear to hold beliefs consistent with one school of economics. I hold with another.

It's actually just math.

Eta: and history

 

[dusty88]

Serious question: those of who you think everything is basically fine in the financial/monetary system:

What is your take on the multiple calls to stop printing large bills (ie $100), negative rates in several countries, and even banning large cash transactions in some countries?

 

[Alpo]

It's actually just math.

Eta: and history

That, and accounting. Nothing as complex as this is a "just".

 

[dusty88]

That, and accounting. Nothing as complex as this is a "just".

I grant you that politicians and academics of recent decades have convinced people that macroeconomics is some special wizardry that us commoners just can't understand.

Macroeconomics is really no different than micro; we just have a MUCH bigger family thus the debt can get unspeakably large before debt-based financing fails in mimicking prosperity.

I'll grant you that no one can know if the statistics such as GDP, global debt, etc are accurate. In fact, some of the markets have been shown to be manipulated but that's another story. It just means the trends can be more extreme than expected before they return to the mean. Still, it's not that difficult to understand the big picture once you realize that math and common sense really do apply. More people are thus realizing that the emperor is naked.

 

[T.Lex]

So, figured I'd put this here:
India raises withdrawal limit as rupee anger mounts - BBC News

In a surprise move, India abolished the 500 and 1k rupee notes. Just can't use them. Hard to figure out a good analogy in the American monetary system, but it would be kinda like abolishing the $50 and $100 bill and requiring people to use $20s and lower.

(Yeah, yeah, yeah, not an ideal analogy.)

 

[dusty88]

So, figured I'd put this here:
India raises withdrawal limit as rupee anger mounts - BBC News

In a surprise move, India abolished the 500 and 1k rupee notes. Just can't use them. Hard to figure out a good analogy in the American monetary system, but it would be kinda like abolishing the $50 and $100 bill and requiring people to use $20s and lower.

(Yeah, yeah, yeah, not an ideal analogy.)

I read a bit about that; not sure but best I can tell it's an attempt to collect a lot more tax. Apparently Indians use cash a lot to avoid taxation.

It certainly does illustrate how quickly government can control currency or commerce if they want to .

 

[T.Lex]

Yeah, then this happened.

Citibank is the first Australian bank to stop taking cash | Business Insider

Citibank Australia has become the first Australian bank to go completely cashless, notifying customers that its branches will no longer handle notes and coins from November 24.

And this:
Australia Should Scrap Big-Denomination Bank Notes, UBS Says - Bloomberg

Australia should follow India’s lead and scrap its biggest bank notes, UBS Group AG said.
“Removing large denomination notes in Australia would be good for the economy and good for the banks,” UBS analysts led by Jonathan Mott said in a note to clients on Monday. Benefits would include reduced crime and welfare fraud, increased tax revenue and a “spike” in bank deposits, he said.

 

[Ericpwp]

But you can't pay your taxes in pennies.