Best explanation for Weimar Republic Inflation I ever read....

Monetary policy is not capitalism. It's libsocialism.

In a free, capitalist market system without a libcommie FDIC and Federal Reserve, how would volatility in money spread throughout the economy? What scenario are you envisioning?

 

You know what else would eliminate runs? The elimination of the libcommie fractional reserve system.

 

Capitalism is self-adjusting. It doesn't need a libcommie Federal Reserve to preserve it.

 

maybe a stock crash, housing crash, war, bank runs contagions etc.

 

I don't see any runs lately do you?

 

if we were on a gold standard and 150% of our gold was going to China there would be depression and collapse and panic.

 

Well, as has been pointed out, bank runs can't occur if there was no fractional reserve banking.

You claim to be for free capitalism. We agree on a lot, but I think you have a blind spot here. I know I'm not going to convince you, but you should look into the subject further. I hope you do. It would allow you to be more consistent in your principles (which are generally pretty good.)

 

No, just booms and busts, a la 2008, brought on by the government interference in the financial industry.

 

If we were on a gold standard, that wouldn't happen. You should look up something called the price-specie flow mechanism. Seriously, I'm not just trying to "win" an argument here. You should look into government interference in the financial sector.

There's a pretty good book called What Has The Government Done to Our Money by a guy named Murray Rothbard. You might want to take a look at that. I'm pretty sure you could find a PDF online.

 

well hard to say what system you are talking about then and what might occur. A free bank, for example, could print all the money it wanted and be at risk for a run.

 

The system I'm talking about is one in which one deposits one's money in a bank and it stays there until you withdraw or write a check (a check being your order for your bank to pay someone from your account). It's impossible for a run to occur under such circumstances.

 

In the absence of government intervention/prevention/prohibition, money is typically gold or silver. Banks can't print gold or silver.

They can, however, create fiduciary media, but if they get aggressive with that, their competitors will catch on and redeem this fiduciary media and the bank would be in trouble.

 

Again, you don't know your history of economic thought. Friedman made his name through criticism of bastardised Keynesianism (based on IS/LM and Phillips Curve nonsense, neither of which came from Keynes). His great insight was in arguing for a temporary inverse relationship between inflationary pressures and unemployment, reflecting money illusion. That was subsequently deemed to be hogwash by the right wingers championing rational expectations.

When Friedman's monetarism was implemented, the consequences were disastrous. Thatcher managed to artificially create a recession worse than the Great Depression.

Keynes, in contrast, continues to dominate intellectual discourse, with numerous sub Schools. I personally find post-Keynesianism the most insightful, particularly in understanding the consequences of market power on pricing and macroeconomic stability.

 

except bank and depositor want to make money so bank prints a little extra and loans a little extra money then competition notices and does the same until you reach the danger zone.

 

no but they can create as much paper as they want as a fraction of the gold or silver reserves.

 

no idea what that means. If bank gets aggressive and makes tons of good loans the bank and depositors get rich while the competitor goes bankrupt

 

if you read his book you see he was ego-manic who applied math to every tiny aspect of any economic situation in the belief that it could be manipulated and improved with his scientific management. Friedman showed it was impossible and there the world now lies with Keynes long since forgotten.

 

utter nonsense liberal gibberish to pretend your little island was a scientific experiment

 

I have read the General Theory. Unsurprisingly it continues to be a core reading for multiple schools of thought. Unsurprisingly you get it wrong. He, for example, certainly brought in economic psychology (and its neoclassicalism which suggests a mathematical purity).

Where's Friedman's monetarism? Where's his money illusion? Old hat stuff based purely on reacting to bastardised Keynesianism.

 

Keynes didn't dominate in China! They switched to Friedman capitalism and instantly eliminated 40% of all the planets poverty!!

 

Mere fact. Thatcher was heavily influenced by Hayek and Friedman, with the latter determining macroeconomic policy. Its also factual to note that the subsequent recession was disastrous.

 

This is nonsense. China is a dictatorship that maintains industrial policy inconsistent with libertarianism. Neither does it employ Friedman's monetarism or his vertical Phillips Curve guff.

 

you mean multiple schools run by statist liberal fools

 

You think the US debt is consistent with 'limited government'. You celebrate dictatorship as shining lights. And you think you can use the term statist?

 

China was a libcommie economic dictatorship that killed 60 million very slowly until it began switching toward Friedman capitalism and thus ushering 800 million into the middle class and saving another 60 million from slowly starving to death