Asset value reset?

[sawfly1]

I know this discussion is not my
Field of expertise. If I have any fields
Of expertise.
I see the point, that full employment
May not be necessary. Automation etc. But what is
The point of delivering 1/2 of the proceeds to
The Top 1/10 of one percent .
Don't they own 1/2 the worlds wealth
Already.
Why not spread the tech benefit around.
Because who will buy the stuff the robots
Are making
And really a lot of things govt.s do actually funnel
Money to the 1/10 %. And Social programs are huge,
I agree and there is a reckoning needed there too

It is not the politics of socialism that Causes problems
You have to have private incentives,
I agree .
Venezuela and Cuba are not models for anything

The problem is if you are living beyond your means.
No matter what system you are under.

Then on to Austrian economics theory that we should
Scrap what we have , and move to the private health care
System that costs 40% more.
I know taxes are bad , but if you pay someone else
40% , more for the same service
Is that not a tax too.

[Austrian Economics]

If you have the time could you give a detailed example.

Credit issued by a nation is backed by the nation and the sum total of all of its activity, assets and even intrinsic value.

It is no different with a bond backed by gold. No one ever sees the gold or even really knows if it is actually in the vaults of the nation or not. They have confidence that it is so they buy the bond and trust that the full amount plus interest will be returned to them in the future.

It is an absolute convenience and a way to standardize the business of the nation to issue credit in the currency of the nation. Only when a nation has absolute control of the standard of accepted currency do you have control of the economy. No currency, no control. It could be tiddly-winks if you can make them free from forgery

If the sum total of the value of a nation's assets are falling, then so must the amount of credit that a nation can issue. You can't get blood out of a stone.

If you have a gold standard but no gold in the vaults, you don't have a gold standard.

You don't need national control of money. Politicians like central banks so they can drive down the rate of interest to levels that a free market in credit would never allow, and hand out free stuff at what appears to be a bargain in financing costs. As the events of this month have shown us, free stuff is not free.

[farming101]

If the sum total of the value of a nation's assets are falling, then so must the amount of credit that a nation can issue. You can't get blood out of a stone.

If you have a gold standard but no gold in the vaults, you don't have a gold standard.

You don't need national control of money. Politicians like central banks so they can drive down the rate of interest to levels that a free market in credit would never allow, and hand out free stuff at what appears to be a bargain in financing costs. As the events of this month have shown us, free stuff is not free.

2008 Canada: GDP down 11.5% and the central bank balance sheet expanded by 25 billion or so

Counterfeiters are still tracked down, government wants and needs to control the money

[AlbertaFarmer5]

It may be too simple but it seems likely that the sum total of all economic activity including the mismanagement, corruption and outright theft somehow ends up being reflected in the GDP. So, if GDP starts to shrink and the government is still sending out money with wild abandon things could go south in a hurry. Probably not if only one sector was affected. That could be put on life support by the rest of the economy.
I think if there is a worldwide effort by the world's economies that have influence it could be done. Inflation takes off when there is a lot of money chasing too few goods. It could happen under the scenario we are facing now.
Right now most are wanting to be made whole, receive assistance or relief with money. So money is still in favor. I think it will be a shortage of goods that could trigger the greater problem.

As a short sighted farmer, who tends to hoard my produce, and prepurchase my inputs(even if that has been the wrong approach the past few years...), with land debt, I am always cheering on inflation, while fearing/planning for deflation.

Not sure what goods are going to be in short supply, unless this stretches out for 6 months or more. But I suspect evidence will point to the futility of that long before that happens. I am concerned that the current crash in oil, and many other commodities will lead the inevitable overshoot, and provide the path to unprecedented prices eventually. I also have little faith in governments/central banks to turn down the fire hose of stimulus soon enough, but whether those dollars find their way into consumer products( which can be ramped up on a dime), or investments, real estate, or tangibles is harder to predict.

[AlbertaFarmer5]

I know this discussion is not my
Field of expertise. If I have any fields
Of expertise.
I see the point, that full employment
May not be necessary. Automation etc. But what is
The point of delivering 1/2 of the proceeds to
The Top 1/10 of one percent .
Don't they own 1/2 the worlds wealth
Already.
Why not spread the tech benefit around.
Because who will buy the stuff the robots
Are making
And really a lot of things govt.s do actually funnel
Money to the 1/10 %. And Social programs are huge,
I agree and there is a reckoning needed there too

It is not the politics of socialism that Causes problems
You have to have private incentives,
I agree .
Venezuela and Cuba are not models for anything

The problem is if you are living beyond your means.
No matter what system you are under.

Then on to Austrian economics theory that we should
Scrap what we have , and move to the private health care
System that costs 40% more.
I know taxes are bad , but if you pay someone else
40% , more for the same service
Is that not a tax too.

All valid points.

As for concentration of wealth, I'm a proponent of offering equal opportunity to everyone to achieve whatever they are capable of within their lifetime.
Best way I can see to accomplish that, is to start everyone from the same level, and provide them with unlimited opportunity, whether they chose to take it or not.

Don't use regressive taxes to punish someone for working harder, and trying to save to start a business venture. Just look at the advantages of incorporating as a farmer, and the disadvantage that puts on someone trying to start out, without the critical mass to justify the accounting/legal fees, let alone the working stiff paying taxes on taxes, then trying to use the after tax dollars to fund a venture.

Probably most important to avoid monopolies and concentration of wealth, and a concept not very popular amongst my fellow farmers, Inheritance/death taxes, our kids are free to build their own fortune if we taught them the right values.

Universal access to education(which doesn't necessarily mean free, it may mean borrowing against future earning the degree will result in, regardless of socio-economic status) to anyone who is capable, and understands the job prospects ( or business prospects)(in other words, not subsidizing basket weaving degrees),

Removing the barriers to entry in business, lets face it, the burden of most environmental, safety, etc regulations favour the established large company over the smaller start up.

As for spreading the benefits around, it really comes down the the equal distribution of poverty, or the unequal distribution of wealth. Is society better or worse off having incentivized Bill Gates, Henry Ford, Mike Lazaridis, Steve Jobs, John Rockfeller, Thomas Edison etc to innovate and create wealth, while getting rich along the way? Would we be where we are today, if not for the massive incentives that motivated those folks?


As for living beyond ones means, how does one define that? If our fellow Canadians can't afford to put made in Canada gas in their car to go the the grocery store to buy made in Canada food that they also can afford because they have no job because we have not enough capital to develop those resources and put them to work doing it, then they are living beyond their means even though they are in abject poverty ?

When there is a surplus of energy, and manufactured products, and food and housing etc etc because no one can afford to buy it due to shortage of what we call currency, so we have to use debt to buy the very products we produce in our own backyard, is it living beyond our means, or something wrong with the concept we call currency? If we automated every industry and no longer needed any workers, we would all be living beyond our means with no income, in an age of plenty.

Living beyond ones means when one, or one's society doesn't produce anything productive is a big problem, and highly unsustainable. But living beyond ones means when one's society is so productive per man hour, that everyone's contribution is no longer required, is completely different, isn't it?

Way back when learning Calculus, and the theory of limits of a function as a variable approaches zero, or infinity, it occurred to me that the concept applies to many situations in life.
Just because we are somewhere between zero and infinite automation(for example), it is still useful to ask what happens as automation approaches either extreme, to get a perspective on where we are right now.

And sorry, I didn't respond as poetically and elegantly ( not to mention eminently readable) as your posts are written, I assume that is iambic pentameter, not sure, poetry was never my strong suit?

[Marusko]

Your first comments about agreeing on governance and policy is what likely will keep from ever changing the system. Somehow we would need to collectively agree that it is in the best interest of society to allow the most ambitious, hardest working, most innovative, most risk averse, smartest individuals to reach their greatest potential, without punishing them with digressive taxes and regulations, even though that means huge wealth disparity, while simultaneously allowing, or even encouraging the least productive or least capable to just stay out of the way and be content with that inequality in exchange for bread and circuses. Physically it is possible, to provide for a high living standard for everyone with only a few highly productive people producing that, just look at the modern food production industry, from farms to processors etc.

Funding it all is obviously where it all breaks down, when you consider money in its current form, it is impossible. Printing(at least in isolation) to fund would destroy the confidence in the currency and collapse the system, taxing the few would destroy the incentive, but any other means of redistributing their production is essentially the same thing as taxing them, taxing the masses is futile if they don't have meaningful wealth creation to tax. No matter what, it looks a lot like the dreaded socialism that I spend so much effort on here to discredit( although the resident socialists do a pretty good job of that all by themselves).

You're talking about a Universal Basic Income.

[sumdumguy]

Trudeau is calling it, “targeted basic income”.

[AlbertaFarmer5]

You're talking about a Universal Basic Income.

That is the conclusion I keep coming to as well. As distasteful as the concept is. Would we be better off without the anchor of big government bureaucracies, picking winners and losers, and unequally demotivating people from contributing, and just write everyone a cheque for enough to cover the necessities , and let them redistribute it to those who are willing to work harder and create? If we are facing QE to infinity anyways, it might make more sense to start at the bottom up with this method?

[farming101]

That is something kicked around by those who are talking about Modern Monetary Theory. Sort of..
I think they feel that the gov't should hire people in times of distress and give them work to do. Public works of some sort? IDK really
So, that's a little different then welfare

[LEP]

That is something kicked around by those who are talking about Modern Monetary Theory. Sort of..
I think they feel that the gov't should hire people in times of distress and give them work to do. Public works of some sort? IDK really
So, that's a little different then welfare

The problem is after bloating the civil service they never seem to find the conditions to reduce it.

[AlbertaFarmer5]

Another concept I keep kicking around, relates to digital currencies. These have the potential to make every dollar customizable, perhaps with a prorated declining value, or adjustable value depending on the economies needs, or even what sector they are in. Some scary big brother type stuff to be sure, but perhaps could be used to achieve a guaranteed minimum income by printing without destroying the confidence in the currency. Or in a case such as this, to get liquidity to where it is needed most instantly.

Not saying I would support such measures, just seeing the interesting intersection of the two issues at a unique time in history.

[AlbertaFarmer5]

Another concept I keep kicking around, relates to digital currencies. These have the potential to make every dollar customizable, perhaps with a prorated declining value, or adjustable value depending on the economies needs, or even what sector they are in. Some scary big brother type stuff to be sure, but perhaps could be used to achieve a guaranteed minimum income by printing without destroying the confidence in the currency. Or in a case such as this, to get liquidity to where it is needed most instantly.

Not saying I would support such measures, just seeing the interesting intersection of the two issues at a unique time in history.

Replying to myself again...

I see today that the Democrats tried to include legislation about digital currencies into the stimulus bill, perhaps my way out there theory isn't so far out after all?

[samhill]

This morning $1.00 U.S= 1.42857 Cdn

[burnt]

This morning $1.00 U.S= 1.42857 Cdn

On the plus side - I priced soys about 6 weeks ago with a weak board and lower basis, not good. But since then, the basis has climbed $1.00/bu., making for a much stronger return.

So there's that, just happy to have some left to price.

Good action on the board and the basis - does this point to stronger commodity demand, or just speculation?

Building demand is good; speculation can make things go crazy.