Governments print money because it's easier than raising taxes. They use this money directly for their purposes, and it reduces the value of everyone's money because there is more money circulating but no actual credit has been created. Creation of credit is complex, and is a service that experienced and well-established banks can perform.
Government operations become monopolies because they do not have to compete with other businesses in their efficient use of resources. Instead of efficiency, government can devote more taxes to their endeavors, and lower the prices of services until there are no competitors.
This is a simplification and a shot in the dark at appealing to your curiosity/reasoning, but from the above two points I wish to derive this: that many of us who invest in silver/gold/cryptocurrency believe the following things: that government itself, in the form it currently appears in, will not stop devaluing our currency, and that most people have attitudes and educations which lead them to indirectly support inflation/devaluation, whether they are aware of it or not.
I have, however, this critique of my own advocacy: that although government itself will not stop devaluing our currency, I do not understand the free market itself and I do not know if the free market will simply crash through the artificiality of government constructs like a tsunami or creep its way through it like the roots of a tree or the mycelium of a fungus.
If indeed the free market simply trumps the attempts of government to control everything, then silver and gold investments would be about as good as just keeping the dollars in the bank.
I don't see how the free market is the enemy of the govt, or vice versa... the government is there to protect private property / interests, and, lately, it has dedicated itself to protect the interests of commercial entities and rich people. commercial entities are OBVIOUSLY VERY interested in expanding their businesses...
Where there's a demand for money a supply will be provided. Why do you think a free banking system wouldn't be expanding the money supply at an even more rapid rate?
>>1095739
Inflation has not been a real issue for a decades. What you are saying is true of the past but at present (north american) governments just borrow money.
So why would you put money into silver, gold, or internet pyramid schemes to hide from it?
>>1095768
Government is not there to dedicate itself to the interests of rich people. Checks and balances are barely skimmed over in public schools and colleges/universities; literally no one gives a shit about the one document which could free us all if we hadn't buried it in shit: the constitution. I see what you meant, but you're wrong to simply distrust or blame "rich people." The people who manipulate government may have money, but rich people do not all use the government to manipulate us. Sure, they dodge taxes, but who the fuck wouldn't? Especially if they were educated and not indoctrinated like most people are. Most of what the federal government does is illegal, and for very good reason.
>>1095782
They can't expand credit arbitrarily; the value of the money created by a bank is actually based on credit, while the Federal Reserve simply prints money based on what economic scientists, or whoever the fuck, say.
>>1095800
Borrowing money is another way of taxing people. Governments borrow money and promise to pay back with interest, but since governments only have the money that they tax from their people, borrowing from another country is basically a promise to tax their own people more in the future.
Same thing goes for government bonds; we are buying a promise from the government to tax the future generations more to pay us back when the bonds mature.
Only government can make a monopoly. This one fact which no one seems to understand, and which was well understood by most Americans who lived to see the Declaration of Independence or the writing of the Constitution, goes to show the consequence of allowing government to control education.
Hard to wrap my head around an alternative that only creates just enough extra money.
Would it be based on births/deaths or some measure of gdp increase I don't know.
>>1095960
Yes of course it will have to be paid, but that has nothing to do with inflation so what's your point? Why hedge against inflation if inflation is a non-issue? Also why hedge in the insanity that is crypto currencies at all? I would take any commodity over crypto as crypto is all speculation and no primary market. Excluding bitcoins and buying drugs off the internet.
I'm not going to argue the monopoly point, because I agree with you there.
>holding fiat
>any year
>>1095971
I don't know if this is the only way of creating credit but this is one way I know about: fractional reserve banking.
A bank is a big, secure place to keep valuables like gold, silver, jewelry, and money. Through experience the bank learns just how much money will not be getting used by people at any given time; this fraction of people's wealth that is simply stored and not used gets loaned out to trustworthy businesses, and generally invested by the bank. See, the bank has the difficult job of researching businesses and borrowers to ensure the investments they make with the money of their depositors appreciate in value on the whole. This is why we earn some interest on the money we keep in banks, we are being paid a portion of what the bank makes.
As for the government's involvement in banking:
When the government bails out a failing bank, it is keeping alive a business that was being run badly and which should have been allowed to die. Kinda like evolution, natural selection must occur or the businesses that we have are not truly fit for their environment and do not serve our interests as well as their would-be successors would have. Government should never protect any business from competition, and should never impose tariffs on any industry, and should never try to save certain people's jobs. It's all illegal and for good reason.
The unused, stored money of thousands of strangers is lent to promising businesses and entrepreneurs through the experience and know-how of banks, and this helps any country prosper when credit like that is available. The U.S. federal government insures deposits up to $250,000. This has the effect of making banks care less about how good their investments in trustworthy businesses and borrowers are, and makes the connection between these thousands of people less fruitful and prosperous.
>>1096003
See, a major problem for banks is when people are afraid that the bank is failing they all come to the bank and try to take out all their money. But the bank had lent a fraction out to borrowers and does not have "all the money." So it fails because people thought it was failing.
When deposits are insured up to $250,000 by the federal government, the bank need not worry so much about this possibility of failing, and it also need not be as intelligent with people's money as it needed to be before. Hence, "less fruitful and prosperous" banking activities.
>>1095960
>consequence of allowing government to control education.
This. This absolutely should never have happened. It is completely at odds with democracy to have the government forcibly 'educating' the majority of the populace, because the extreme potential to sway future voters.
>>1095985
My point is that inflation is a tax, and an especially pleasing one to government.
I understand your distrust of crypto. As for silver and gold, I don't know the first thing about the supply side of their story. So I can't blindly invest; then again it's just so pretty lol.
https://www.youtube.com/watch?v=eG2POwIwA8E
What is your overall point?
>>1096003
I'm talking about if the system of money creation was based on creating just enough to service the new growth in the economy, rather than the central bank increasing or decreasing the money supply to stimulate whatever change they want to see.
>>1095960
>Only government can make a monopoly.
Wrong, wrong, wrong. Turn off Hannity for a minute. Government INaction allows monopolies every day. When a business is freed from all rules, responsibility, and accountability, it has even more resources to use in more undesirable ways to crush competition. If you think it's bad now, just wait until you get your wish.
>>1095739
Recommend all /biz/nessmen read this article.
http://www.rrojasdatabank.info/rogoff2008.pdf
>>1096550
I think what he means is only a government can create a monopoly and then defend it with violence.
>Government INaction allows monopolies every day.
Inaction to counter the other government interference. Does not necessarily mean a monopoly would've formed in a free market.
>When a business is freed from all rules, responsibility, and accountability, it has even more resources to use in more undesirable ways to crush competition.
A free market does not mean a company is free from all rules, responsibility, and accountability. Shareholders and customers are the immediately obvious stakeholders that guide how a company would be run under a free market.
Secondly, you highlight current large companies supported by government regulations would have more resources free to pursue a monopoly, but ignore their competitors also having more resources. More competition does not increase the chances of a monopoly forming.
>>1096550
This. It is false thinking to treat businesses as individuals thinking in a true free market they will act above board to ensure their survival. Look at Enron for example. Executives at Enron did not care about anything or anyone else but the short term profit they could reap while fucking everyone else over. They knew full well that it was unsustainable long term. They didn't care about bankruptcy because the company was made of individuals who would have just done it again somewhere else after the company tanked. The only reason that Enron hasn't happened again is because of Sarbanes Oxley and the gaurantee of prison time and hefty fees gauranteed for any future company that is involved in fraud. It made them accountable. SOX also created enormous costs for compliance of publically traded companies which some would say creates a monopolistic environment because not every company that goes public has that type of money to shell out towards internal audit departments and creation of extra financial controls for governance, but the flip side is that the stock market would not exist today if investors couldnt have any amount of confidence that companies were not misreporting their revenue.
To go
Back to the main point, government created monopolies are a byproduct of greed and malfeasance just like the billions of tax payer dollars that go towards prisons. It is a necessary evil because if there were no rules and regulations that defined how companies can do businesses the system would cultivate bad players all across the board. If there is anything that capitalism has shown us it is that companies will do exactly what they can get away with. If it doesnt affect the bottom line to act ethically then they will but profit margins are all that matter at the end of the day. If you think government created monopolies are bad they are nothing compared to the powerhouses that would be spawned from removing government guidelines and regulations altogether.
>>1096601
>The only reason that Enron hasn't happened again is because of Sarbanes Oxley and the gaurantee of prison time and hefty fees gauranteed for any future company that is involved in fraud
Yeah go ahead and prove that.
I can claim just as reasonably that the only reason enron happened in the first place was the complacency that government mandated financial reporting and auditing caused and the entire legal construction of how shareholders can interact with the company and it's managers which stopped any thorough investigation on their part.
> if there were no rules and regulations that defined how companies can do businesses the system would cultivate bad players all across the board
And those bad players would be identified and their risk priced into whatever dealings other people would have with them.
>If it doesnt affect the bottom line to act ethically then they will but profit margins are all that matter at the end of the day.
You presume a lot about the billions of potential stakeholders in these companies.
>>1096623
>I can claim just as reasonably that the only reason enron happened in the first place was the complacency that government mandated financial reporting and auditing caused and the entire legal construction of how shareholders can interact with the company and it's managers which stopped any thorough investigation on their part.
You do realize that you are making my point for me right? You have a limited understanding of financial reporting and you aren't painting the full picture but other than that you are correct. The government (specifically the SEC) WAS lax and complacent. They allowed Arthur Anderson to handle the audit without any regulation or penalty if AA wasn't thorough enough. With SOX, the executives themselves are accountable and not just for financial reporting, but also for the whole internal control matrix. Again, this is expensive to implement, remediate and enforce but it was entirely necessary so that that external auditors could not claim ignorance in the future.
Might be a noob question but if oil is falling why is tvix falling with it?
>>1096630
>The government (specifically the SEC) WAS lax and complacent. They allowed Arthur Anderson to handle the audit without any regulation or penalty if AA wasn't thorough enough. With SOX, the executives themselves are accountable and not just for financial reporting, but also for the whole internal control matrix. Again, this is expensive to implement, remediate and enforce but it was entirely necessary so that that external auditors could not claim ignorance in the future.
And now instead of the market reacting to the enron collapse in the most efficient manner, we get more government regulation causing the same problems as before.
Do I know exactly how a free market would handle enron? Not exactly but I have some guesses. Like:
>Voluntarily stricter auditing (where people feel it's worth the cost, otherwise no)
>Lower share price reflecting the risk of fraud, now they know that the government isn't claiming to protect them
>Different executive remuneration (without distortion from taxes and restrictions who knows how the company will choose to pay their staff)
>Different methods of financial reporting, ones that perhaps don't incentivize short term gains or figures on key dates
>Different company structure that doesn't prioritize share price
>Different relationship between shareholder and company, now that the government won't be there to arrest or kill shareholders attempting to enter company premises
If the market is fine with enrons every few years, then probably nothing would change, no need for governments to step in and force all these costs and inefficiencies on everyone.
Always easy to look at what your socialist uni professor told you and add 1+1 thus proving government saved the day once again.
It's harder to see the broader negative effects of governments that happen later or indirectly.
>>1096656
>the most efficient manner
The most efficient manner would have been a full on collapse. You can't price in the risk of fraud into stocks. It doesn't work like that. It's either the system as a whole is dependable or it's not and It's not if there is no government oversight or threat of penalty for those who commit fraud.
Also my Econ teacher was a borderline libertarian and supporter of Laissez-faire like most Econ professors are. All theory and no practicality.
>>1096678
>You can't price in the risk of fraud into stocks
You're saying you can't price risk into investments when that is what everyone does their entire lives when weighing up economic decisions.
>It's either the system as a whole is dependable or it's not and It's not if there is no government oversight or threat of penalty for those who commit fraud
Just plain false, there does not have to be some overarching dependable system. Individuals can weigh up risk v return in individual cases.
Private enterprise has proven it is capable of designing systems to lower risk even with governments stepping in assuming responsibility.
>>1096685
>You're saying you can't price risk into investments
Straw man. I said it is impossible to price risk of fraud into stocks which is a fairly big distinction. Fraud is not something that can be prevented, only detected after the fact and there is no way to determine when and where it will happen therefore making it unquantifiable. Also, the only deterrent is to have severe penalties for those who commit it. The reason that regulations like SOX exist is that it is very often hard to determine who is the perpetrator of the fraud so a framework was set up which forces accountability. Your solution of just letting the market work it out is not at all feasible. That would be like going to a unregulated casino and playing roulette where the ball has a good chance of being weighted. The freedom to commit fraud undermines confidence in the whole system. Even having a third party come in and audit them is not a solution if that third party is unaccountable (as in the case of Arthur Andersen). Government oversight is a necessary evil which allows investors confidence that they are not being fucked over. Without that confidence, you would have something akin to China who's market is rampant with insider trading and securities fraud. Their market is less superior to the US market which is why they have undertaken a complete overhaul of their financial systems and governance.
>>1096710
> I said it is impossible to price risk of fraud into stocks which is a fairly big distinction. Fraud is not something that can be prevented, only detected after the fact and there is no way to determine when and where it will happen therefore making it unquantifiable.
If this was true why did enron stocks tank as investors started to suspect a problem?
>Also, the only deterrent is to have severe penalties for those who commit it.
Are you saying you believe the enron managers involved would've found no problems getting jobs in the future?
>The freedom to commit fraud undermines confidence in the whole system.
No it just increases risk, changing the valuation in an investors mind and creating an opportunity for a private enterprise to step in and make money.
>Even having a third party come in and audit them is not a solution if that third party is unaccountable (as in the case of Arthur Andersen).
The third party was accountable to the government and it didn't help.
Do you think arthur andersen would've got work as an audit firm after enron in a free market?
>Government oversight is a necessary evil which allows investors confidence that they are not being fucked over. Without that confidence, you would have something akin to China who's market is rampant with insider trading and securities fraud. Their market is less superior to the US market which is why they have undertaken a complete overhaul of their financial systems and governance.
The Chinese market is home to rampant government manipulation. Many of those committing fraud are government members or state owned corporations or otherwise related to the government. Terrible example.
>>1096601
While I do think some regulations like SOX create problems for small companies, the only alternative ever presented by /biz/ and Reaganomics is to not do anything at all, which is not only lazy but embarrassingly stupid.
>>1096718
Sorry had to move over to my computer from my phone since you have huge gaps in your understanding and this is going to take a little more typing.
>If this was true why did enron stocks tank as investors started to suspect a problem?
After the fact. Further proving my point.
>Are you saying you believe the enron managers involved would've found no problems getting jobs in the future?
Are you saying that not being able to get another job is a severe penalty for someone who just made millions of dollars ripping off the public? Them ruining their reputation is a deterrent to what? I know I would definitely take that penalty if it means making easy millions.
>No it just increases risk, changing the valuation in an investors mind and creating an opportunity for a private enterprise to step in and make money.
Did you read anything that I posted? Why would anyone go play roulette at a casino if the ball is probably weighted? It's the same reason most people don't invest in Shanghai or Shenzhen stock exchanges without insider information. It isn't just "more risky" to invest, it is full blown stupid.
>The third party was accountable to the government and it didn't help.
No they weren't. Now they are though.
>Do you think arthur andersen would've got work as an audit firm after enron in a free market?
Do you think that Arthur Andersen would have gotten caught in a free market? Trick question. The answer is no.
> Many of those committing fraud are government members or state owned corporations or otherwise related to the government
Wot. I'm not following your logic at all. Are you really going to imply that there is insider trading and securities fraud because the government is too involved in the chinese stock exchange and not too little?
>>1096757
Exactly. Their solution to a dam leaking is to blow up the dam instead of trying to further patch the leaks.
>>1096771
>After the fact. Further proving my point.
It's been proven that the share price fall was entirely a reaction and that none of it was based on future expectations?
I doubt that very much.
>Are you saying that not being able to get another job is a severe penalty for someone who just made millions of dollars ripping off the public? Them ruining their reputation is a deterrent to what? I know I would definitely take that penalty if it means making easy millions.
Yet only a tiny minority of people took that path before SOX.
> Why would anyone go play roulette at a casino if the ball [isn't properly] weighted?
They probably wouldn't. Depends on the odds and their appetite for risk. That casino would have to get their balls weighted and prove with a reasonable degree of certainty that they stay properly weighted or they would lose customers. Perhaps the loss of customers is acceptable to them. That would be their call to make.
> It's the same reason most people don't invest in Shanghai or Shenzhen stock exchanges without insider information. It isn't just "more risky" to invest, it is full blown stupid.
Most people don't invest sure. Why does that matter? If those companies and exchanges want more business, they will have to reform. Or not. Entirely up to them and their customers what happens, without a government stepping in and making one single blanket decision for millions of people.
>Do you think that Arthur Andersen would have gotten caught in a free market? Trick question. The answer is no.
Of course, that kind of information would be too valuable to not be released or found.
>>1096797
At this point you are arguing on semantics. I could address them but instead I will speak to your overall assertion which is that a free market doesn't cultivate fraud and if it does, these frauds will be detected and the free market will somehow prevent them from happening again due to a Darwinian survival of the fittest type of arena where the ethical businesses will survive. I don't believe this to be the case at all. I believe the least ethical businesses will survive and flourish and crush their competition by any means necessary. I also believe that the only thing holding most businesses back from being Enrons is that there is government intervention. The reasons for this is that companies are made up of individuals and personal gain doesn't always line up with company longevity. How many times have we seen CEOs run companies into the ground and then parachute out on hefty severance packages? If they exploit every legal means and skirt (and sometimes cross) the boundaries of illegalities, what do you think would happen if those regulations were lifted?
Libertarianism tries to bring us back to this awareness: that we are a republic because our founding fathers hated democracy.
Deserves to be repeated: our founding fathers hated democracy.
They knew democracy was worse than garbage; our constitution, -- and its authors' commentaries and writings show this, -- was meant to be a framework for the thriving of a free-market economy.
As someone said, businesses aren't free to lie and cheat and steal in a free market. Customers can smell rats. Insurance companies would be able to protect the interests of their customers and potential customers base; however, of course, governments outlaw any law-keepers other than their own police at the moment.
The cycle of war and civil war and revolutions is inevitable in centralized, government-infected economies. Government is force; it begins with the forceful taking of taxes from people. Tell me, are people more responsible when it's not their own money they are using to do "assigned shit" with?
I understand that you are very informed and educated about the wrong-doings of certain companies, and how they can conspire to steal from and lie to many people and make pyramid schemes. But these things are still illegal under free-market government.
This thread has gone full retard.
>>1097553
btw I'm OP. idk why my ID changed.
The problem with our understanding each other is somewhere among and around these points, though perhaps not all of them:
1. Regulations always appeal to emotions.
2. Government controls schools and education.
3. Government implies taxation; taxation implies government.
3a. When government "starts a business" in some industry, it plants the seed of a monopoly. This is because increased taxes can always cover the costs typical of the industry and translate to lower prices for customers than there exist in a free market. Government doing what businesses do is not part of a free market because it can always easily make its prices lower than every other business. Education is the prime example of this.
3b. Government does not stop when it is doing something inefficient, it keeps going because bureaucrats want to keep their jobs and they get bribed by the industry they are regulating while being helped to continue selling the image of their regulatory agency as "executives of social justice."
4. Government generally grows until it is unsustainable, then revolution happens. It is all unnecessary, and our founding fathers hoped to have prevented this or at least held it off as long as possible. Again, they did not intend a democracy which can make laws; they intended a republic where the people have sovereignty.
Two very important checks and balances I know about are jury nullification and the power of the purse, assigned solely to the house of representatives. According to the constitution, the house of representatives controls ALL the funds of ALL branches of government; no money can go to ANY government project without the house of representatives granting it. Of course, Washington DC does not follow the law of the land and feels no obligation to educate about the true intentions of the founding fathers.
I suck my own fucking dick,
>>1097567
Im with this guy
