Analysis: Davos leaders uneasy over glut of easy money

Comments (7)
Bob9999 wrote:

During the 19th Century, before modern central banking was invented, there was an oscillating cycle of inflation during times of economic expansion and deflation during times of economic contraction. One result was that the dollar, to take an example, held its value over the long term. Another result was that times of economic contractions were very harsh. Modern central banking interferes with the deflationary side of that period of oscillation. One result appears to be that currencies do not hold their value over long period of time, because even a 2% annual inflation rate adds up over the long haul. That does not necessarily mean that we are in for a period of suddenly increased inflation, but it does mean that everyday consumer goods are at least 10 times more expensive in nominal dollars as they were in the mid-1960s and that they will be far more than 10 times more expensive in nominal dollars in the mid-2060s.

Jan 22, 2013 2:11pm EST  --  Report as abuse
AdamSmith wrote:

Quoting from Abraham Lincoln, 1860:

“Corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”

Jan 22, 2013 3:53pm EST  --  Report as abuse
stevedebi wrote:

No, you are quoting from a bogus report published 20 years after Lincoln died. He never said that.

Jan 22, 2013 4:56pm EST  --  Report as abuse
AdamSmith wrote:

Quoting from Sir Thomas More, in Utopia, published in 1516:

“Where possessions be private, where money bearethe all the stroke, it is harde and almost impossible that there the weal publique may justeleye be governed, and prosperously floryshe.”

Courtesy of:
David Rothkopf’s book, Power, Inc.

Jan 22, 2013 9:50pm EST  --  Report as abuse
123456951 wrote:

During the financial crisis in 2008, the money supply was allowed to increase too fast. This led to real estate bubbles, etc. Now the money supply is being allowed to grow once again even more. This double increase in the money supply is what historians may look back at as a big mistake. What bothers me is that I do not think that politicians like Obama and others really care about there being too much money, and it’s potential effect. Every problem to them is just another public relations problem. The way to fix any public relations problem is to simply talk in broad uplifting generalizations(“our great nation needs to work together”, etc etc), and then also spend more money on whatever their agendas might be. In Washington talk is cheap, and fiscal responsibility is only half hearted.

Jan 23, 2013 1:44am EST  --  Report as abuse
paintcan wrote:

@123456951- most government problems are “public relations” problems. The King of Bhutan wasn’t being naive when he said governments should worry more about the happiness of the governed. The trouble with his statement is, it is becoming very difficult in modern societies to define happiness at all.

But I agree with you that the world economies are too sophisticated for platitudes.

The modern world is relying to much on “money” to define all activity and even happiness. Perhaps human beings world wide should grab back some autonomy and Shaker like (not proposing the world become Shakers – they all practiced life time chastity) but create communities that keep the larger world economy at bay and establish satisfying ways of living and working that need not be money based or only use it only under controlled conditions? Members of Shaker communities only used money when dealing with outsiders. Inside – no one used it. Each community also kept a fund that allowed them to reimburse any member who may have donated goods, money or land to reclaim the cash value if they chose to leave. Inflation was generally low then and I don’t know whether they paid interest.

This makes sense if “future world” means a two tiered society of a relatively small percentage of unimaginably wealthy people and a far larger mass of people just getting by with little meaningful employment.

The wealthy shouldn’t get too comfortable with their fortunes. They have already given their class permission to annihilate tens of thousands in protracted warfare to preserve “our” way of life and investments and should more than realize that they did so using the “expendable” lower income groups to do the dirty work. If the expendables can only look forward to a slow drip of life support from an increasingly oligarchic system, the upper tiers shouldn’t expect to last too long. The wealthy can also be very expendable too as history frequently illustrates. Need I mention any examples? I can.

Jan 23, 2013 11:10am EST  --  Report as abuse
paintcan wrote:

@stevedeb – Whether or not Lincoln said it – he could easily have known about the latifundia or ancient Rome. He could also have thought about the economies of Europe and Latin America that still allowed a few well-placed lords with feudal privilege to own vast amounts of undeveloped and semi developed land. The Radziwills of Poland owned tens of thousands of villages. There are plenty of wannabe Radziwills in the modern world, no doubt. The big box retail outlets are all latifundia in the making.

Theodore Roosevelt was no great fan of the “monopolies”. Possibly, the definition of monopolies isn’t up to speed now?

No economic system will work very well for long if it fails to allow the vast majority the “pursuit of happiness”. In fact many will give up looking for “happiness” in the economies and will drift away of die off. Most will not consent to die off but will tear down what stands in their way. After all – it IS “only money”.

Jan 23, 2013 11:31am EST  --  Report as abuse
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