[ckaihatsu]

2) You pay off the debt by cutting back on spending.

No, all of society should *not* be in hock to financial valuations, meaning the world-arbitrary 'strength' of the world's reserve currency, the U.S. dollar -- you're implicitly arguing for *austerity* all over again.

That means I'm not going to mandate someone must be paid $15 to flip a burger,

Or, it's simply 'the cost of doing business'. The market has spoken.

[Truth To Power]

They could give people some other asset that is equivalent to set quantity of gold.

No other asset is equivalent to a set quantity of gold. If you are talking about assets equal to gold money, using that other asset to represent the value of gold is circular.

The idea is definitely possible, but I will concede it is probably not desirable.

It's theoretically possible, not possible in practice.

I'm pretty sure if we went back completely to the gold standard, gold would suddenly skyrocket in price. (being how it behaves as a fiat currency)

Gold doesn't behave like a fiat currency. If someone starts using gold as money, or 100% gold-backed money, and others are attracted to that model, the initial user's conversion rate will deflate because the supply of gold cannot be arbitrarily increased to match the increased monetary demand. Deflation, probably severe, is inevitable.

Well, maybe it would not increase in price actually. The Central Bank would have to dump all those other reserve assets it owns back into the economy, so maybe things would balance out.

If gold is money, it makes no sense to say it would decrease in price.

I know a lot of people are too stupid to realize this, but reducing the money supply does not have to always necessarily result in deflation. So long as the ratio of currency to reserve assets are still the same. It is a little bit complicated. Obviously below a certain threshold the lack of actual currency will start getting in the way of economic activity and the existing money may start taking on some properties of fiat currency, and there will be intense pressure on Reserve Rates to go down (to expand the "money" supply in bank accounts), probably even sparking some sort of black market.

It's actually a somewhat complicated problem to try to mathematically analyse.

It's not complicated to figure out that if one economy of $1T GDP converts to gold money, and then other economies totaling $10T GDP try to join in, the total supply of gold has to go a lot farther. That's deflation, which kills economic activity.

[Puffer Fish]

Gold doesn't behave like a fiat currency. If someone starts using gold as money, or 100% gold-backed money, and others are attracted to that model, the initial user's conversion rate will deflate because the supply of gold cannot be arbitrarily increased to match the increased monetary demand. Deflation, probably severe, is inevitable.

I see what you are saying.
It is probably a lot easier to convert from gold-backed currency to a non-gold currency than convert from the reverse.
Obviously it would probably require converting to a new currency. And this might even need to happen more than once, because the price of gold might start rapidly increasing, accompanied by high levels of deflation of the currency.

It don't think it is impossible. But you might be right to point out it could be problematic.

[Puffer Fish]

That's deflation, which kills economic activity.

Okay, first of all it's a fallacy to say that inflation is good and that deflation kills economic activity.

A little bit of deflation is not a bad thing.

[Steve_American]

I see what you are saying.
It is probably a lot easier to convert from gold-backed currency to a non-gold currency than convert from the reverse.
Obviously it would probably require converting to a new currency. And this might even need to happen more than once, because the price of gold might start rapidly increasing, accompanied by high levels of deflation of the currency.

It don't think it is impossible. But you might be right to point out it could be problematic.

To get back onto gold, this is where I'd start.

1] Compare the total national gold supply to the total national debt plus currency in circulation. Money is also created today when banks make loans, so this money should not IMHO be backed by gold.

2] Set a new price for converting dollars, yen, euros, etc. into gold. I did this 2 years ago. IIRC, in the US gold needed to cost something like $7000/ troy oz. [12 troy oz. = 1 pound of gold.]

3] What this would go to all other nations is a huge question.

4] What this would do to the US economy is another big question.
.

[Steve_American]

Okay, first of all it's a fallacy to say that inflation is good and that deflation kills economic activity.

A little bit of deflation is not a bad thing.

With all due respect.
A little inflation is also not a bad thing.

The problem with both our statements is that, as long 'a little bit' is undefined with a number or a comparison to something like GDP, they carry very little useful info.

Please define a little bit of deflation that you think is just fine. Try to make it as large as possible.
I can do the same for inflation. Central banks mostly want inflation to be about 2%/yr.
High and so very bad inflation is much over 5%/yr.

Your turn.
.

[Steve_American]

I don't think you understand how the Central Bank (or Federal Reserve Bank) system works very well.
Theoretically all bank notes (in this case currency) are backed by the Reserve Bank's Reserve Assets. All outstanding notes (money that has been issued) represent "liabilities" for the bank, which are exactly matched by "assets" (Reserve Assets on the bank's balance sheet). Theoretically the bank could sell off some of its assets and retire some of the outstanding notes (which would contract the amount of currency).

Of course this is more theoretical these days, but it is not true to say that the Central Bank currency (which most currency is these days) is backed by nothing. There do exist Reserve Assets.

Discussing this in more detail could get very complicated.

There are theoretical situations where a Central Bank could expand the money supply with virtually no effect on inflation.
Especially if they do what they are "supposed to do" (I mean financial prudence, not overpaying when they buy assets for example). In some sense, the value of the currency could be seen as the ratio of the value of the Reserve Assets divided by units of currency in circulation. So long as that ratio does not change then (in some situations) there should be no inflation.
(In Reality this is rarely what the Central Bank does, so there usually is inflation, but it's not really directly in proportion to the amount of new currency issued)

I say everything here with a caveat of course since it is far more complicated, but I am trying to get you to understand a basic element of this system and how it works, the foundation of the theory, you might say.

The currency is "backed" by the Reserve Assets in multiple (indirect) ways, but the "primary" way is that the Central Bank could theoretically sell off those Reserve Assets at some point. Then there is also the Reserve Requirement on private banks that forces them to put up assets (almost always loans). (Right now the Reserve rate in the US has been dropped to zero, something I disagree with, so this is irrelevant)

It is certainly possible that I don't understand how central banking works, because I never claimed to be an expert. This last is why I often post links to actual experts. OTOH, it is possible that I'm right and it is you who don't understand how central banks work.

I did a tiny amount of googling. The 2nd article it showed ME (google might show you something different) says things that seem to support me.
link => https://www.investopedia.com/terms/c/centralbank.asp
There is says, "A central bank can be a lender of last resort to troubled financial institutions and even governments."

__________________________.___________________________________________________

Now, off the top of my head, IIRC, after the GFC/2008, a FOIA request forced the Fed. to issue a report that it had created out of the air and lent to banks around the world, a staggering amount. It was about $27 trillion. Because it is from an official Fed. report, I'm going to ask everyone to accept this as a *fact*.

Now, I'm asking you how could the Fed. do this if it was constrained by its 'assets' in what it can do?

It seems to me that this proves that I'm right and the Fed, the ECB, the BoJ, and other central banks have assets because they choose to buy them to regulate the economy in some way. And so, these assets don't constrain it at all. In fact, they just *create* the dollars ( or other currency) to buy them.

Your turn. Please support your so far unsupported assertions that all central banks need assets to operate.
. . . Until you provide some little bit of support, the lurkers should not take your word for it.
.

[late]

A little bit of deflation is not a bad thing.

There is a good reason economists don't want a gold standard.

There are also good reasons deflation scares economists.

You're stuck in Crazy Town.

[ckaihatsu]

2] Exactly, raise taxes and cut spending to have a surplus is how you pay-down to someday pay-OFF the debt.

With the economic crisis of 2019-2020 and then the pandemic, push-came-to-shove, and the Biden administration has been demonstrably *anti*-austerity. You're arguing for *austerity*.

https://en.wikipedia.org/wiki/American_Rescue_Plan_Act_of_2021#Key_elements


---

Freakin' conservatives *always* fetishize the money supply itself.

Ironically it's actually progressives who do that.

The reason progressives are not clamoring so much about this issue is because their governments already have Central Banks to do all the monetary manipulation that progressives approve of. ("The Fed" in the US) Even then, constant opinions are still coming out of the news telling the Central Bank what they should do, and you can tell they are never conservative-hatched beliefs.

You're trying to make party-politics political *hay* out of this, and it's utter bullshit. On this thread you're showing yourself to certainly be as focused on *monetary policy* as any other economic nationalist, whether 'progressive' or otherwise.


---

4] That economic theory forgets that 'money' is a store of value, among other things. This means that if the nation's gov. feeds deficit currency units into the economy at a rate that matches the savings rate (whether by nationals or by foreigners), then inflation will be low.

That's just an economic fallacy and is not even logical.

Inflation is not just determined by the amount of money floating around and exchanging hands, like you think.
(The Velocity theory of money is wrong)

It's because of *financialization* in the 1980s that capital has now come to expect steady profits -- from the hyper-exploitation of semi-colonial sweatshop labor in China and elsewhere -- even if those profits have to come from the U.S. government itself, through its cheap-government-money injections of liquidity into the markets.

In other words the money supply has to catch-up to the burgeoning *real value* from the exploitation of sweatshop labor. The U.S. dollar is not currently suffering from the effects of inflation because it's *not devaluing* -- it has been enjoying the assurances and direct foreign investment of the rest of the world.

The 'multiplier effect' / velocity of money is *one* factor, among others. Certainly if overall *volume* / velocity is down -- and it is -- then investment capital is, by definition, *parked* into secure assets like the U.S. dollar and U.S. Treasuries and real estate, *boosting* those paper valuations, but without 'velocity' there's no actual real economy of regular economic exchanges, so then no capitalism, and the government is called upon to inject liquidity in the form of deficit government spending.

Overall it's a Ponzi-scheme dynamic, generally -- regardless of the labor being exploited, and the commodity being produced, there's the inexorable ever-increasing *financialization* into the Ponzi scheme structure. That's capitalism. (See Evergrande.)


---

“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

U.S. federal deregulation in the 1980s of many types of banking practices paved the way for the rapid growth in the size, profitability and political power of the financial sector. Such financial sector practices included creating private mortgage-backed securities,[14] and more speculative approaches to creating and trading derivatives based on new quantitative models of risk and value,.[15] Wall Street ramped up pressure on the United States Congress for more deregulation, including for the repeal of Glass-Steagall, a New Deal law that, among other things, prohibits a bank that accepts deposits from functioning as an investment bank since the latter entails greater risks.[16]

As a result of this rapid financialization, the financial sector scaled up vastly in the span of a few decades. In 1978, the financial sector comprised 3.5% of the American economy (that is, it made up 3.5% of U.S. GDP), but by 2007 it had reached 5.9%. Profits in the American financial sector in 2009 were six times higher on average than in 1980, compared with non-financial sector profits, which on average were just over twice what they were in 1980. Financial sector profits grew by 800%, adjusted for inflation, from 1980 to 2005. In comparison with the rest of the economy, U.S. nonfinancial sector profits grew by 250% during the same period. For context, financial sector profits from the 1930s until 1980 grew at the same rate as the rest of the American economy.[17]

https://en.wikipedia.org/wiki/Financialization

---

We all want high wages, we just seem to disagree what that means.

Printing more money to give people "high wages" isn't going to be helpful.

Neither so much is taxing the economy to "try to create more jobs".

You're being patronizing by saying 'we all want high wages', because you then go on to argue that such is 'impossible'.

Yours is a *reactionary* line because you're switching-in *monetary policy* as a decoy to distract from *fiscal policy*.


---

[T]here will be intense pressure on Reserve Rates to go down (to expand the "money" supply in bank accounts), probably even sparking some sort of black market.

It's actually a somewhat complicated problem to try to mathematically analyse.

It's not a 'mathematical' issue -- again it's *fiscal*. What social interests should receive the benefit of government spending, in whatever form.

You're basically juxtaposing strong-dollar *nationalist* interests against *working class* interests.


---

If the US had not expanded its money supply, each dollar would have simply become worth more.
Then people would need less money.

People's individual needs for 'money' are different than the *government's* needs for 'money', which are both different from *corporations'* needs for 'money'.

Social services spending is needed by individuals / people themselves, while *other* concerns may be for liquidity for the financial system, or for the country's currency strength (or weakness), versus its international trading rivals.


---

I personally would still argue the country would have been better off if less money were printed and gradual deflation had been allowed.

This is a *nationalist* interest, and it amounts to economic *retrenchment* since a strong nationalist currency wouldn't be *competitive*, for exporting, compared to other exporting international rivals.

Those who keep claiming that Japan proves that a government can run up massive deficits without causing inflation do not really understand the economic history of what happened in Japan so well.

I will say that it must have definitely created inflationary pressure in Japan, even though that effect did not become manifest in the form of visible inflation.
(because it was also in the presence of a deflationary force)

Japan, along with the U.S., Europe, and other developed nations, have all been benefitting from the *labor exploitation* of global sweatshop labor, which provides the actual *value*, in the form of actual goods and services produced by them, and available on the world market. The First World currencies / money-supplies have been having to *catch-up* to that gargantuan provisioning of commodities *value*, by hyper-exploited sweatshop labor, with governments massively increasing their currency face-values -- while not experiencing inflation, as would normally be expected in a typical domestic situation of dollars-chasing-an-imploded-economy-of-shrunken-productivity.


---

depreciation is to be avoided at almost any cost.

Your economic position keeps vacillating, SA -- here you're arguing for a nationalist 'strong dollar', while at other times you've argued for *liquidity*.

Here's from the history:

From 1980 to 1985, the dollar had appreciated by about 50% against the Japanese yen, Deutsche Mark, French franc, and British pound, the currencies of the next four biggest economies at the time.[8] In March 1985, just before the G7, the dollar reached its highest valuation ever against the British pound, a valuation which would remain untopped for over 30 years.[9] This caused considerable difficulties for American industry but at first their lobbying was largely ignored by the government. The financial sector was able to profit from the rising dollar, and a depreciation would have run counter to the Reagan administration's plans for bringing down inflation. A broad alliance of manufacturers, service providers, and farmers responded by running an increasingly high-profile campaign asking for protection against foreign competition. Major players included grain exporters, the U.S. automotive industry, heavy American manufacturers like Caterpillar Inc., as well as high-tech companies including IBM and Motorola. By 1985, their campaign had acquired sufficient traction for Congress to begin considering passing protectionist laws. The negative prospect of trade restrictions spurred the White House to begin the negotiations that led to the Plaza Accord.[10][11]

The devaluation was justified to reduce the U.S. current account deficit, which had reached 3.5% of the GDP, and to help the U.S. economy to emerge from a serious recession that began in the early 1980s. The U.S. Federal Reserve System under Paul Volcker had halted the stagflation crisis of the 1970s by raising interest rates. The increased interest rate sufficiently controlled domestic monetary policy and staved off inflation. By 1975, Nixon successfully convinced several OPEC countries to trade oil only in USD, and the US would in return, give them regional military support. This sudden infusion of international demand for dollars gave the USD the infusion it needed in the 1970s.[12] However, a strong dollar is a double edged sword, inducing the Triffin dilemma, which on the one hand, gave more spending power to domestic consumers, companies, and to the US government, and on the other hand, hampered US exports until the value of the dollar re-equilibrated. The U.S. automobile industry was unable to recover.

Effects

Trade deficit

While for the first two years the US deficit only worsened, it then began to turn around as the elasticities had risen enough that the quantity effects began to outweigh the valuation effect.[7] The devaluation made U.S. exports cheaper to purchase for its trading partners, which in turn allegedly meant that other countries would buy more American-made goods and services. The Plaza Accord failed to help reduce the U.S.–Japan trade deficit, but it did reduce the U.S. deficit with other countries by making U.S. exports more competitive.[4][better source needed] And thus, the US Congress refrained from enacting protectionist trade barriers.[7]

The Plaza Accord was successful in reducing the U.S. trade deficit with Western European nations, but largely failed to fulfill its primary objective of alleviating the trade deficit with Japan. This deficit was due to structural conditions that were insensitive to monetary policy, specifically trade conditions.

https://en.wikipedia.org/wiki/Plaza_Accord

[ckaihatsu]

It is probably a lot easier to convert from gold-backed currency to a non-gold currency than convert from the reverse.
Obviously it would probably require converting to a new currency. And this might even need to happen more than once, because the price of gold might start rapidly increasing, accompanied by high levels of deflation of the currency.

It don't think it is impossible. But you might be right to point out it could be problematic.

The quantities at-play here are [1] the total currency money-supply (face values), and [2] the total economy of goods and services available on the market.

If *money* is chasing goods-and-services, then that means the economy is *underproductive*, for whatever reason, and prices are going to go *up*, as with any country's economy *imploding* or otherwise suddenly becoming *uncompetitive* on the global market -- inflation.

If commodity-production / labor-exploitation is chasing *money*, then that means workers are willing to work for less wages, and those with spare-money / capital are going to have greater *purchasing power*, for goods and services -- deflation.

The inherent *biology* of it is that the global population keeps growing, so the global *economy* needs to *also* expand at the same rate or greater, so as to 'tread water' -- to provide the same general per-capita quantity and quality of goods and services to an *increased* number of people who necessarily need access to modern-day goods and services, for modern living.

Whatever the measuring-stick / currency, there is an inherent *ceiling* in any exchange-value / monetary instrument, because that instrument is *finite* in quantity (at its introduction, as with Bitcoin), while the continued growth in population *and* economy-size goes on *indefinitely* -- is open-ended.

Here's an illustration I made for a *post*-capitalist political economy context, but it's illustrative for the present-day as well:


Pies Must Line Up

Spoiler: show

---

2] Set a new price for converting dollars, yen, euros, etc. into gold. I did this 2 years ago. IIRC, in the US gold needed to cost something like $7000/ troy oz. [12 troy oz. = 1 pound of gold.]

The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, in response to increasing inflation, the most significant of which were wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold.[1]

Although Nixon's actions did not formally abolish the existing Bretton Woods system of international financial exchange, the suspension of one of its key components effectively rendered the Bretton Woods system inoperative.[2] While Nixon publicly stated his intention to resume direct convertibility of the dollar after reforms to the Bretton Woods system had been implemented, all attempts at reform proved unsuccessful. By 1973, the Bretton Woods system was replaced de facto by the current regime based on freely floating fiat currencies.[3]

https://en.wikipedia.org/wiki/Nixon_shock

[ckaihatsu]

[T]here will be intense pressure on Reserve Rates to go down (to expand the "money" supply in bank accounts), probably even sparking some sort of black market.

The 'black market' here is the *shadow banking* system of finance:

https://en.wikipedia.org/wiki/Shadow_banking_system

[Truth To Power]

Okay, first of all it's a fallacy to say that inflation is good and that deflation kills economic activity.

I didn't say inflation is good. But modest inflation does stimulate economic activity because people choose to spend their money rather than watching its value erode.

A little bit of deflation is not a bad thing.

History shows that deflation is effectively always a bad thing.

[ckaihatsu]

CORRECTION:

Whatever the measuring-stick / currency, there is an inherent *ceiling* in any exchange-value / monetary instrument, because that instrument is *finite* in quantity (at its introduction, as with Bitcoin), while the continued growth in population *and* economy-size goes on *indefinitely* -- is open-ended.

The continued growth in economy-size objectively *needs* to go on indefinitely -- but there are no *guarantees*, of course.

[Steve_American]

@ckaihatsu,
Sir, you quote me here,

Steve_American wrote:
2] Set a new price for converting dollars, yen, euros, etc. into gold. I did this 2 years ago. IIRC, in the US gold needed to cost something like $7000/ troy oz. [12 troy oz. = 1 pound of gold.]

Then you went on about what Pres. Nixon did in 1971 to fight inflation and also took the world off the gold standard, which soon led to the world to go mostly on a floating currency system.

I'm confused. These 2 thinks seem unrelated.
. . . In 1971 the dollar was pegged at $35/oz. Now, the market price for gold is $1800. When I did the calculation 2 years ago I got about IIRC $7000/oz. Since then there has been a lot more deficit spending that has led to growth in the national debt, so for the US to go onto the gold standard the US would have to set the gold peg at about $8000/ox, which is 4 times its current market price.
. . . This would make gold holders richer and destabilized the world economy.

I do grasp the advantage of going this. But then, I like it that the US and other advanced nations that are not in the EU & EZ can spend in a down turn to save the economy. I feel sorry for citizens of the nations of the EU because their nation can only spend now in the pandemic emergency because the ECB is massively breaking the rules to keep their nations from defaulting on their debt. IMO, FDR & WWII showed us that only massive spending can end a depression. With the gold standard, this is much harder.

BTW --- I'm asking the conservatives here what is the difference between taxing bond holders to pay other bond holders. then taxing some other bond holders to pay the 1st bond holders, etc. until the debt is all paid off; and defaulting on the debt.

Someone here suggested that the US must tax the middle class to pay down the debt, because the rich will avoid the tax (by fleeing the US if necessary).
. . . IMHO, this is a stupid idea. The middle class doesn't have $28 trillion in assets to tax away. Doing this would lead to a massive depression.

Anyone in power (note that no one here is 'in power') who suggests paying down or paying-off the national debt, is a liar. It is that simple. They must know that this will never happen. Can never happen. So, why are they saying we should do this, or that someday we will have to do this? They must have some agenda and are using this claim to terrify people. So, they can advance their agenda based on this lie.
.

[ckaihatsu]

@ckaihatsu,
Sir, you quote me here,


2] Set a new price for converting dollars, yen, euros, etc. into gold. I did this 2 years ago. IIRC, in the US gold needed to cost something like $7000/ troy oz. [12 troy oz. = 1 pound of gold.]


Then you went on about what Pres. Nixon did in 1971 to fight inflation and also took the world off the gold standard, which soon led to the world to go mostly on a floating currency system.

Yeah, I meant to indicate that the U.S. could no longer keep the gold window open:

Decline

Dollar

Reinforcing the relative decline in U.S. power and the dissatisfaction of Europe and Japan with the system was the continuing decline of the dollar—the foundation that had underpinned the post-1945 global trading system. The Vietnam War and the refusal of the administration of U.S. President Lyndon B. Johnson to pay for it and its Great Society programs through taxation resulted in an increased dollar outflow to pay for the military expenditures and rampant inflation, which led to the deterioration of the U.S. balance of trade position. In the late 1960s, the dollar was overvalued with its current trading position, while the German Mark and the yen were undervalued; and, naturally, the Germans and the Japanese had no desire to revalue and thereby make their exports more expensive, whereas the U.S. sought to maintain its international credibility by avoiding devaluation.[46] Meanwhile, the pressure on government reserves was intensified by the new international currency markets, with their vast pools of speculative capital moving around in search of quick profits.[45]

https://en.wikipedia.org/wiki/Bretton_W ... tem#Dollar

You seem to be toying with the idea of *returning* to gold as a yardstick, but I think we both know that the global economy requires far more *flexibility* than any finite-face-value, necessarily-deflationary currency instrument can provide, all cryptocurrencies included. I think NFTs are the latest craze, mostly for their ease of ownership management compared to past financial vehicles for retaining wealth values.

[Igor Antunov]

-Decentralize state further
-Corporations take over even more
-Feudalism, CEO's as kings, social media and mainstream media corps as church/clergy, wealthy as landowners everybody else serfs can no longer afford to move around the country tied to their rental cubicle, chipped, 100% dependent on corporate overlords for sustenance and employment.

Sounds like a plan where can I sign up.

[ckaihatsu]

-Decentralize state further
-Corporations take over even more
-Feudalism, CEO's as kings, social media and mainstream media corps as church/clergy, wealthy as landowners everybody else serfs can no longer afford to move around the country tied to their rental cubicle, chipped, 100% dependent on corporate overlords for sustenance and employment.

Sounds like a plan where can I sign up.
[img]https://i.imgur.com/MH0Z87h.jpg[img]

Much of this is *already* in place, and is the worldwide norm these days -- 'neofeudalism', or 'global medievalism'.

I have to point out that corporations' monopolizations are *enabled* by government / state, and have historically been *nationalist* / monetarist concerns, like the British East India Company or the Dutch East India Company.

Both states and corporations have no *intrinsic* interest to 'decentralize', or otherwise self-limit their own power and reach. It's telling to see what roles they all played internationally, during the height of political tensions:

From slump to war

The slump led to tensions between states as well as between classes. The rulers of each country sought to ease the pressure on themselves at the expense of their rivals abroad. One after another they tried to expand the sales of domestically produced goods by devaluing their currencies and raising tariff barriers. The widespread tendency was towards ‘autarchy’—the production of as many goods as possible within the boundaries of the national state.

The state was also more involved than ever before (except during the First World War) in direct economic activities—rationalising some industries by forcing the closing of inefficient firms, and establishing direct state ownership of some sectors so as to enhance the prospects of others. Even the Conservative ‘national’ government in Britain nationalised the electricity supply, the national airlines and coal mining rights.

In some of the less industrially advanced countries of Latin America and Europe the process went considerably further. ‘Populist’ governments like that of Vargas in Brazil and later Peron in Argentina established large state-owned sectors. A right wing government in Poland laid down a long term economic plan, and Mussolini in Italy set up state-run companies in an attempt to dampen the impact of the world economic crisis.

However, there was a contradiction between the use of the state to try and bolster each national group of capitalists and the desire of all capitalists for access to resources beyond the narrow boundaries of the individual state. The only way to reconcile this contradiction was to expand the area which the state controlled. Formal empires and informal ‘spheres of influence’ became all-important. The autarchy was that of ‘currency blocks’ dominated by the major powers—the dollar block, the sterling area, the gold block (centred on France and its empire), the mark block and the USSR. As the economist Alvin Hansen pointed out in 1932:

Each country strives to develop spheres of influence where the encroachment of capitalists of other nations is resented. At times the US has prevented the European powers collecting their debts in Latin America by naval blockades… Similarly, the long struggle (not yet terminated) between European powers over domination of Africa, the Near East and, indirectly, by economic, financial and military patronage to control the Balkan states, is a record of international strife and friction that the penetration of foreign capital has entailed.236


The spheres of influence were not symmetrical. The rulers of Britain, France, the US and the USSR each controlled vast areas. Germany, the most powerful industrial power in continental Europe, had no colonies and was constrained by the narrow borders imposed on it by the other powers in the Treaty of Versailles at the end of the First World War. The effect of the crisis, as we have seen, was to swing German big business to campaign vigorously to break the restraints imposed by Versailles. It wanted to recover German territory lost to Poland at the end of the war, absorb the German-speaking Austrian state and Czech border lands (the ‘Sudetenland’) and resume the drive for hegemony in south east Europe. Hitler’s victory was not only a victory of capital over workers. It was also a victory for those forces which wanted to solve the crisis of German capitalism by a policy of military expansion at the expense of the other Great Powers.

Germany’s major industrial groups agreed, more or less willingly, to coordinate their efforts and accept increasing central allocation of investment, state control of foreign trade and state rationing of raw materials.

Harman, _People's History of the World_, pp. 519-520

[Steve_American]

Yeah, I meant to indicate that the U.S. could no longer keep the gold window open:

OK, that explains that,

You seem to be toying with the idea of *returning* to gold as a yardstick, but I think we both know that the global economy requires far more *flexibility* than any finite-face-value, necessarily-deflationary currency instrument can provide, all cryptocurrencies included. I think NFTs are the latest craze, mostly for their ease of ownership management compared to past financial vehicles for retaining wealth values.

Sir, with all due respect,
either I need to write clearer, or you need to work on you reading for comprehension skills.

I was explaining to Puffer Fish and BlutoSays that going back to a gold standard is impossible, and not a good idea anyway. Like late said in his post. It is impossible mostly because of 4 Repud Presidents. spending like drunken sailors and then calling on the Dems to slash spending. The Repuds are still crying about spending after Trump set records for deficit spending in a single year after cutting taxes on the already rich.

I was explaining to BloutSays that his sound money is not stable. Maybe the lurkers can grok my proof, because he can't face facts.
.

[late]

I was explaining to BloutSays that his sound money is not stable. Maybe the lurkers can grok my proof, because he can't face facts.

In the 1800s, after the Civil War, we had a growing economy and the gold standard. Every few years the economy would grow past the money supply, and the economy would crash.

Gonna be blunt, a gold standard is batsh*t crazy. The only people in favor of it are lunatics and the ignorant.

[ckaihatsu]

OK, that explains that,


Sir, with all due respect,
either I need to write clearer, or you need to work on you reading for comprehension skills.

I was explaining to Puffer Fish and BlutoSays that going back to a gold standard is impossible, and not a good idea anyway. Like late said in his post. It is impossible mostly because of 4 Repud Presidents. spending like drunken sailors and then calling on the Dems to slash spending. The Repuds are still crying about spending after Trump set records for deficit spending in a single year after cutting taxes on the already rich.

I was explaining to BloutSays that his sound money is not stable. Maybe the lurkers can grok my proof, because he can't face facts.
.

No prob, okay.