If the economy grew at the rate of mining pre1976 and had no relationship post1976 then your hypothesis would be proven.
Ahhh! I understand what you are misunderstanding, now. You think that I said that the change in size of the pool of currency IS the change in the size of the economy itself. Here’s what I said:
The total pool of currency needs to be able to grow with the economy.
The pool of currency and the economy are two separate things that can grow at two separate rates. It just creates serious economic problems when they are not aligned with each other. Homework assignment: read up on the Great Depression.
If it is true that total pool of currency needs to be able to grow with the economy then the rate one variable grows must be linked to the rate the other grows. If there is no link then there is no relationship.
The great depression was caused by a stock market over inflated with leverage. This has nothing to do with the gold standard.
And notice how we have deviated from the topic of deflation. It’s a topic built on myth and misunderstanding that easily slips out of focus.
There is absolutely no evidence that deflation itself is bad. The great depression occurred because there was too much debt. Japan suffered in the 90s because it had too much debt. Deflation/inflation just measures who gains more over time, debtors or lenders.
If it is true that total pool of currency needs to be able to grow with the economy then the rate one variable grows must be linked to the rate the other grows.
You’re just repeating the same mistake. We both agree this is not true, as in the economy can grow while the currency pool stays constant. They change independent from each other. It’s just really bad when they both don’t grow on a similar scale. They only need to grow at the same rate in order to maintain a healthy growing economy. The relationship/link between them is that when they get too out of sync, there will be a correction.
The great depression was caused by a stock market over inflated with leverage. This has nothing to do with the gold standard.
Kind of wild that you can admit that the worst economic downturn of all history was caused by debt, that deflation and inflation impact the way debt works, and in the very same paragraph say that “There is absolutely no evidence that deflation itself is bad.” without a shred of self-reflection or irony. So, you understand that debt causes depressions, but simultaneously think an economic force that amplifies debt is totally harmless?? Make it make sense!!
During World War I, many countries suspended their gold standard in varying ways
It’s in the first line. The cause here is WWI, not the great depression. These are countries going broke and abandoning the gold standard because of war, not because they are experiencing deflation.
Exactly. The quantity of debt relative to GDP is what is of concern. You are linking to the right things. Go back, reread them and then take a long walk and have a good think.
Huh? Your reading comprehension needs some work. This is a list of causes of the Great Depression. Of course the Great Depression is not a cause of the Great Depression. The first cause of the Great Depression in the list is… (drum roll, please): the effects of the gold standard!!!
abandoning the gold standard because of war
Hmmmmmmmmmmmmmmmmmmmmmm what about war causes deflationary currency to be unsuitable? 🤔🤔🤔🤔🤔 And are those conditions exclusive to war? Checkmate. That was easy!
The conditions mean that debts cannot be repaid. Thats the fear. Not because the gradual increasing purchasing power of the underlying currency that actually benefits the bondholders.
Does deflation increase or decrease the amount of debt? 🤔🤔🤔🤔
I could literally do this all day lol its effortless to just be correct. It must be exhausting to need to constantly spin the argument and futily reconcile the inconsistencies and mental gymnastics of your position.
Ahhh! I understand what you are misunderstanding, now. You think that I said that the change in size of the pool of currency IS the change in the size of the economy itself. Here’s what I said:
The pool of currency and the economy are two separate things that can grow at two separate rates. It just creates serious economic problems when they are not aligned with each other. Homework assignment: read up on the Great Depression.
If it is true that total pool of currency needs to be able to grow with the economy then the rate one variable grows must be linked to the rate the other grows. If there is no link then there is no relationship.
The great depression was caused by a stock market over inflated with leverage. This has nothing to do with the gold standard.
And notice how we have deviated from the topic of deflation. It’s a topic built on myth and misunderstanding that easily slips out of focus.
There is absolutely no evidence that deflation itself is bad. The great depression occurred because there was too much debt. Japan suffered in the 90s because it had too much debt. Deflation/inflation just measures who gains more over time, debtors or lenders.
You’re just repeating the same mistake. We both agree this is not true, as in the economy can grow while the currency pool stays constant. They change independent from each other. It’s just really bad when they both don’t grow on a similar scale. They only need to grow at the same rate in order to maintain a healthy growing economy. The relationship/link between them is that when they get too out of sync, there will be a correction.
https://en.wikipedia.org/wiki/Great_Depression#Attempts_to_return_to_the_Gold_Standard Again, facts and history disagrees with you. It’s literally the very first on the list of causes lol
You’re certainly trying to, but I have not.
LOL. YES!!! DING DING DING! And how does deflation impact debt? Does it increase or decrease debt? https://en.wikipedia.org/wiki/Debt_deflation 😊
Kind of wild that you can admit that the worst economic downturn of all history was caused by debt, that deflation and inflation impact the way debt works, and in the very same paragraph say that “There is absolutely no evidence that deflation itself is bad.” without a shred of self-reflection or irony. So, you understand that debt causes depressions, but simultaneously think an economic force that amplifies debt is totally harmless?? Make it make sense!!
It’s in the first line. The cause here is WWI, not the great depression. These are countries going broke and abandoning the gold standard because of war, not because they are experiencing deflation.
Exactly. The quantity of debt relative to GDP is what is of concern. You are linking to the right things. Go back, reread them and then take a long walk and have a good think.
Huh? Your reading comprehension needs some work. This is a list of causes of the Great Depression. Of course the Great Depression is not a cause of the Great Depression. The first cause of the Great Depression in the list is… (drum roll, please): the effects of the gold standard!!!
Hmmmmmmmmmmmmmmmmmmmmmm what about war causes deflationary currency to be unsuitable? 🤔🤔🤔🤔🤔 And are those conditions exclusive to war? Checkmate. That was easy!
The conditions mean that debts cannot be repaid. Thats the fear. Not because the gradual increasing purchasing power of the underlying currency that actually benefits the bondholders.
Take a walk. Have a think.
Does deflation make debt easier or harder to repay? 🤔🤔🤔🤔
Again, an econ 101 class would really help you
Deflation makes debt harder to repay and it rewards the debt owners with greater purchasing power.
This means deflation is actually a good thing for half of the economy (the bond holders). Not the monster it is always made out as being.
Again. The amount of debt is the worry, not the gradual change in value of the denomination.
Does deflation increase or decrease the amount of debt? 🤔🤔🤔🤔
I could literally do this all day lol its effortless to just be correct. It must be exhausting to need to constantly spin the argument and futily reconcile the inconsistencies and mental gymnastics of your position.