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deflation; some questions
Tweet Topic Started: Nov 12 2008, 06:11 AM (553 Views)
HoosierLars Nov 14 2008, 06:00 PM Post #76
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eelbor
Nov 14 2008, 05:05 PM
Napoleon III used aluminum tableware at state dinners, and gave aluminum ornaments as gifts. The value of aluminum was so high that only the most wealthy could even contemplate its use. This Wöhler process used to refine aluminum was laborious and expensive. The cost of aluminum in 1855 was $113 per pound. Now you can get a pound for a little over a dollar.

Eel, what do you think of my opinion that attaching the US$ to some tangible asset like gold isn't necessary today, because all currencies and commodites can be exchanged for each other almost 24/7 on some exchange? Your example points out that the value of many commodities can change dramatically due various many factors.

I've agreed with the oldSchool in the past that tying the US$ to some tangible asset might help restrain the government from over-spending. However it would also cause many problems, such as inhibiting the growth of the money supply to match real wealth creation.
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brumdog44 Nov 15 2008, 01:02 AM Post #77
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aaronk2727
Nov 14 2008, 12:13 AM
brumdog44
Nov 13 2008, 09:46 PM
aaron, is a vacant lot worth as much as a lot with a house?

If an arsonist burns an uninsured house down, you've turned a house into a vacant lot.

What you have to remember is that the number of houses in the world is NOT a fixed amount.
he who is correct about dinosaurs. wouldn't you agree that in our scenario the value of every other existing house increases slightly when one if burned down? It is so miniscule in our current society that your example is virtually undetectable. But imagine if there were only 10 houses currently and 1 of them burnt down. What happens to the value of the other 9?
If there are 10 houses and one burns, the others may gain value, but NOT at a 11% increase, which would have to occur if wealth didn't increase.

As I said, there is not a set number of houses. The person living in the house could move into one of the other owned houses and split the cost or they could choose to rebuild. The option they choose will have an affect on the value of the other 9 houses, thus wealth is not constant.
Edited by brumdog44, Nov 15 2008, 01:03 AM.
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Mr Gray Nov 15 2008, 09:48 AM Post #78
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brumdog44
Nov 15 2008, 01:02 AM
aaronk2727
Nov 14 2008, 12:13 AM
brumdog44
Nov 13 2008, 09:46 PM
aaron, is a vacant lot worth as much as a lot with a house?

If an arsonist burns an uninsured house down, you've turned a house into a vacant lot.

What you have to remember is that the number of houses in the world is NOT a fixed amount.
he who is correct about dinosaurs. wouldn't you agree that in our scenario the value of every other existing house increases slightly when one if burned down? It is so miniscule in our current society that your example is virtually undetectable. But imagine if there were only 10 houses currently and 1 of them burnt down. What happens to the value of the other 9?
If there are 10 houses and one burns, the others may gain value, but NOT at a 11% increase, which would have to occur if wealth didn't increase.

As I said, there is not a set number of houses. The person living in the house could move into one of the other owned houses and split the cost or they could choose to rebuild. The option they choose will have an affect on the value of the other 9 houses, thus wealth is not constant.
wrong. the 2nd that the house burns down, the other 9 increase in value by 11%.....it's an economic fact.
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The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism.
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eelbor Nov 15 2008, 10:30 AM Post #79
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aaronk2727
Nov 15 2008, 09:48 AM
brumdog44
Nov 15 2008, 01:02 AM
aaronk2727
Nov 14 2008, 12:13 AM
brumdog44
Nov 13 2008, 09:46 PM
aaron, is a vacant lot worth as much as a lot with a house?

If an arsonist burns an uninsured house down, you've turned a house into a vacant lot.

What you have to remember is that the number of houses in the world is NOT a fixed amount.
he who is correct about dinosaurs. wouldn't you agree that in our scenario the value of every other existing house increases slightly when one if burned down? It is so miniscule in our current society that your example is virtually undetectable. But imagine if there were only 10 houses currently and 1 of them burnt down. What happens to the value of the other 9?
If there are 10 houses and one burns, the others may gain value, but NOT at a 11% increase, which would have to occur if wealth didn't increase.

As I said, there is not a set number of houses. The person living in the house could move into one of the other owned houses and split the cost or they could choose to rebuild. The option they choose will have an affect on the value of the other 9 houses, thus wealth is not constant.
wrong. the 2nd that the house burns down, the other 9 increase in value by 11%.....it's an economic fact.
Not if there are only 7 people needing homes. Supply and demand.
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"Liberal, shmiberal. That should be a new word. Shmiberal: one who is assumed liberal, just because he's a professional whiner in the newspaper. If you'll read the subtext for many of those old strips, you'll find the heart of an old-fashioned Libertarian. And I'd be a Libertarian, if they weren't all a bunch of tax-dodging professional whiners." - Berkeley Breathed


Meat is Murder. Sweet, delicious murder.
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Mr Gray Nov 15 2008, 02:36 PM Post #80
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eelbor
Nov 15 2008, 10:30 AM
aaronk2727
Nov 15 2008, 09:48 AM
brumdog44
Nov 15 2008, 01:02 AM
aaronk2727
Nov 14 2008, 12:13 AM
brumdog44
Nov 13 2008, 09:46 PM
aaron, is a vacant lot worth as much as a lot with a house?

If an arsonist burns an uninsured house down, you've turned a house into a vacant lot.

What you have to remember is that the number of houses in the world is NOT a fixed amount.
he who is correct about dinosaurs. wouldn't you agree that in our scenario the value of every other existing house increases slightly when one if burned down? It is so miniscule in our current society that your example is virtually undetectable. But imagine if there were only 10 houses currently and 1 of them burnt down. What happens to the value of the other 9?
If there are 10 houses and one burns, the others may gain value, but NOT at a 11% increase, which would have to occur if wealth didn't increase.

As I said, there is not a set number of houses. The person living in the house could move into one of the other owned houses and split the cost or they could choose to rebuild. The option they choose will have an affect on the value of the other 9 houses, thus wealth is not constant.
wrong. the 2nd that the house burns down, the other 9 increase in value by 11%.....it's an economic fact.
Not if there are only 7 people needing homes. Supply and demand.
sure, but in "he who is correct about dinosaurs" 's example, he said nothing about population decreasing or increasing
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The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism.
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