Should we abolish the RBA (2 Viewers)

[nousernameleft]

Australia can get rid of inflation once and for all, if we don't inflate the money supply.

Older dictionaries define inflation as being an increase in the money supply.

Newer ones define inflation 'as a general increase in prices'.

The older ones are correct. You can have inflation without an increase in general

prices.

Inflation tends to cause prices to rise.

Politicians have used the word incorrectly for expediency.

They blame OPEC, consumers, labor unions for inflation.

All of these can be proven wrong.

A gold standard means that our central banks cant inflate.

The reason politicians hate the gold standard is because it severley limits their

ability to spend recklessly.

Deflation is not a bad thing. Gently falling prices are good, it rewards savers.

Deflation means that money will have higher PPP.

visit the mises.org

 

[volition]

Yes, abolish the RBA and see the average person's quality of life rise imo. inflation of the currency is like a hidden tax.

 

[rama_v]

Is it just me or are there far more libertarians online than in real life?

 

[volition]

Is it just me or are there far more libertarians online than in real life?

Yea this is probably true

 

[banco55]

Yes, absolutely. We don't need a gold standard either. Just a complete free market for money. The market may then determine what is the best currency or currencies.

That would make for an efficient economy.

 

[DavidBenGurion]

I say we abolish the human brain too. Without the human brain there is NO BRAIN CANCER!

 

[gibbo153]

pull a Mugabe, just ban inflation

we could also ban inequality, perhaps even unemployment.


on a sidenote,
Glenn Stevens goes to my church. I said to him that i guess i'm lucky to be doing HSC economics at such an interesting time, and he said "To be honest I'd prefer it to be a lot less interesting".

another sidenote; his daughter is in my year.

she doesn't do economics.

 

[B_B_J]

if you dont mind me asking, what school?

 

[gibbo153]

caringbah

 

[ComingUpForAir]

Yes, absolutely. We don't need a gold standard either. Just a complete free market for money. The market may then determine what is the best currency or currencies.

can you elaborate on this point...
Are you suggesting firms create their own paper currencies? or we use oversea's currency, or what?

I think it's good that people are having this debate,
but people who derive their entire world view from youtube/mises.org et al, have (no offence) that '9/11 truth' persecution complex aroma

 

[gibbo153]

can you elaborate on this point...
Are you suggesting firms create their own paper currencies? or we use oversea's currency, or what?

I think it's good that people are having this debate,
but people who derive their entire world view from youtube/mises.org et al, have (no offence) that '9/11 truth' persecution complex aroma

agreed. no offense to OP but this reminds me of plenty of 'i read a one plage blog and now i'm passionately opinionated about [x]' rants. not to say this is necessarily the case.

 

[gibbo153]

we could go all Spartan and trade with iron bars.

and then fail at trading seeing as other people don't want to exchange their beautiful gold coins for some crappy, rusty old poles

 

[DavidBenGurion]

if you dont mind me asking, what school?

The Laffer school of Economics

kekekekekeke

 

[gibbo153]

oh you went there.
i love it how you go there.

 

[ComingUpForAir]

Hahaha, I'm not a 9/11 conspiracy theorist.

Yes, firms could create their own paper currency, but it would be unlikely to catch on.

Gold and silver would probably be used as the main mediums of exchange because they have such historical importance as stores of value.

Remember, gold, silver and privately minted currencies have served us well for centuries. Government monopoly controlled fiat money is a relatively recent phenomenon.

You must raise your conscious to the nuanced trade-off between commercial effeicentcy/market liquidity and moral hazard. If as you claim, 'gold, silver etc served us well', then they would have remained the predominant currency. Obviously the gold standard would eliminate supply-side inflation, but it is by no means a perfect system, I agree that it would be very useful in limiting goverment spending (and 'fed' distortions), but their are negative externalities associated with commodity currencies (hence ineffeicent market outcomes).

 

[S.H.O.D.A.N.]

Things like the gold and silver standards cannot cope with population growth without the government mining more gold or silver out of the ground to counteract deflation and too little liquidity, as Friedman himself astutely noted. Now why does that process sound familiar?

Inflation is only weakly, if at all, tied to interest rates when rates are low anyway, so I really don't see the problem besides it being a Libertarian thought exercise in taking the exact opposite stance of the government.

Edit: I meant too little liquidity, not excess.

 

[youngminii]

Strength = currency?

 

[S.H.O.D.A.N.]

agreed. no offense to OP but this reminds me of plenty of 'i read a one plage blog and now i'm passionately opinionated about [x]' rants.

That's usually what Libertarianism amounts to.

 

[volition]

shodan, why would gold and silver standards not be able to cope with population growth? What do you mean when you say deflation?

 

[S.H.O.D.A.N.]

shodan, why would gold and silver standards not be able to cope with population growth? What do you mean when you say deflation?

It depends what the definition of 'is' is, right?

Edit: in case you were serious: While it's true that a gold standard would remove inflation, if the increase in trade (e.g. as comes with population growth) outpaces the money supply (e.g. gold), the only way to counteract deflation (and accompanying recession) in that case is to dig up more gold. However, if too much gold is dug up, you have inflation. You'd obviously need some sort of independent financial body to monitor the gold supply.

I trust I don't have to explain what 'deflation' means since you seem to have pretty strong opinions about inflation which one would hope had some sort of minimal logical basis.