national debt and zero-sum games
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national debt and zero-sum games
 
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I keep hearing people claim that any debt the US builds/acquires will have to be paid (or defaulted on) by "our children and their children". This oversimplification has always _seemed_ fundamentally wrong to me ... more wrong than just being an oversimplification. It doesn't seem to me like the economy is a zero-sum game. Money isn't subject to any conservation laws that I"m aware of. Granted, there are economic drivers that are conserved; but money isn't one of them. So, what literature do I need to start reading that will help me a) understand what is and isn't conserved about debt and b) clarify this point to those who insist on making the oversimplified argument? I'm not convinced one way or the other; I just want to find a bit of clarity around this soundbite. In particular, it strikes me that on a personal scale (time and distance), money is mostly conserved. E.g. I pile up credit card debt or buy a house and that debt sticks with me. I either have to pay it off or default (or die). But is that true at all scales? I've spent some time looking at generic books and popular magazine articles on economics. But they lack the clarity I need (or perhaps I'm too thick to understand them). And the sources for Game Theory I've seen are too idealistic to get any real traction for an argument. Thanks. -- glen e. p. ropella, 971-222-9095, http://agent-based-modeling.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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Glen,
I share your misgivings about the current discussions regarding money, Before the second world war there was an Austrian or Austro-Hungarian school of economics that had substantially different ideas than is currently in fashion. My understanding is that Brettton Woods ? agreement ,after the war, ended the old school and started the one we now think is "Normal" The name that sticks out is Von Mises. I have a copy somewhere but it was thicker than my own PhD thesis and never had the courage to crack it open. It is a little late in my life for such a dramatic shift of intellectual pursuit.. Reading Herodotus I am convinced children rarely pay off the debts of their forefathers and would rather emigrate or fight. Trying to extract ancient debts from the unwilling is a nasty affair that costs more than it returns. Solon's approach to declare bankruptcy for Athens is said to have saved the city and heralded in a new era of Prosperity. If money does not last forever then it seems debt is just as short lived. Maybe others have more details or ideas to add to the discussions. Debt crisis have been downplayed by historians I suspect because they did not fully understand the economics or principles. Vladimyr Ivan Burachynsky Ph.D.(Civil Eng.), M.Sc.(Mech.Eng.), M.Sc.(Biology) 120-1053 Beaverhill Blvd. Winnipeg, Manitoba CANADA R2J 3R2 (204) 2548321 Phone/Fax [hidden email] -----Original Message----- From: [hidden email] [mailto:[hidden email]] On Behalf Of glen e. p. ropella Sent: September 10, 2010 11:42 AM To: The Friday Morning Applied Complexity Coffee Group Subject: [FRIAM] national debt and zero-sum games I keep hearing people claim that any debt the US builds/acquires will have to be paid (or defaulted on) by "our children and their children". This oversimplification has always _seemed_ fundamentally wrong to me ... more wrong than just being an oversimplification. It doesn't seem to me like the economy is a zero-sum game. Money isn't subject to any conservation laws that I"m aware of. Granted, there are economic drivers that are conserved; but money isn't one of them. So, what literature do I need to start reading that will help me a) understand what is and isn't conserved about debt and b) clarify this point to those who insist on making the oversimplified argument? I'm not convinced one way or the other; I just want to find a bit of clarity around this soundbite. In particular, it strikes me that on a personal scale (time and distance), money is mostly conserved. E.g. I pile up credit card debt or buy a house and that debt sticks with me. I either have to pay it off or default (or die). But is that true at all scales? I've spent some time looking at generic books and popular magazine articles on economics. But they lack the clarity I need (or perhaps I'm too thick to understand them). And the sources for Game Theory I've seen are too idealistic to get any real traction for an argument. Thanks. -- glen e. p. ropella, 971-222-9095, http://agent-based-modeling.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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In reply to this post by glen e. p. ropella-2
On 9/10/10 10:42 AM, glen e. p. ropella wrote:
> I keep hearing people claim that any debt the US builds/acquires will > have to be paid (or defaulted on) by "our children and their children". > http://www.aei.org/article/29262 ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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Money, as with any commodity, is subject to a mass balance law: What comes out = what goes in, +/- accumulation.
On Fri, Sep 10, 2010 at 11:21 AM, Marcus G. Daniels <[hidden email]> wrote:
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In reply to this post by Vladimyr Burachynsky
Vladimyr, Glen,
Agreed! Even in the cases where there is not forfeit or fight, however, the situation is not as bad as it seems. First, the notion that this particular nation will even be "out of debt" seems unlikely, at least unlikely in the next 50 to 100 years. Second, one of the major reasons for the government to manage inflation is because inflation devalues debt. So, on top of the other concerns brought up, it is misleading to say that we are passing the debt onto our children because, 1) the nation will continuously float debt, which in some sense means that the current debt will never really be paid off, 2) by the time my children are paying off parts of the current debt, the effective value of the debt will be much less. The president of Penn State was shocked when a recent survey of entering freshmen showed that the vast majority expected to become millionaires. To me, the statistics seemed very realistic... with the added caveat that being a millionaire might not be very impressive at that point. Eric On Fri, Sep 10, 2010 01:05 PM, "Vladimyr Ivan Burachynsky" <[hidden email]> wrote: Glen, ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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Money is a strange creature. Since it is not tied to any physical entity, as it would under a gold standard, say, money can be created by central banks. This is the case in the U.S. with the Federal Reserve Board. It has meaning as a medium of exchange to the extent people are willing to accept it. The whole process is complex and the subject of study in courses on the economics of money and banking. One key policy lever that central banks have is control on the (partial) reserve requirements of banks under their jurisdiction. Also the amount of money created depends on the velocity of money, that is how often it is spent and deposit in banks who can they lend out some fraction of it (subject to the reserve requirements). This leads to the so-called multiplier effect. In toto, monetary policy in influencing the money supply can have dramatic effects on the economy, even long-term. Also, government fiscal policy when it can run deficits can also have multiplier effects. Of course, this all becomes much more complicated in a global economy with independent monetary authorities and independent nation states making fiscal decisions about taxes and spending. See http://en.wikipedia.org/wiki/Money_creation for some background.
On Fri, Sep 10, 2010 at 11:42 AM, ERIC P. CHARLES <[hidden email]> wrote:
-- George Duncan georgeduncanart.com represented by Artistas de Santa Fe www.artistasdesantafe.com (505) 983-6895 Life must be understood backwards; but... it must be lived forward. Soren Kierkegaard ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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In reply to this post by Eric Charles
Hi Glen ,
It looks in some ways that inflation is a polite way to avoid fight or flight and that used to be the jurisdiction of governments. It is not clear how governments can fiddle much anymore as lowering the bank lending rate rarely results in lowering consumer debt rates. That has been one argument for governments taking over the banking sector, no doubt the other is that it would be like giving the fox the keys to the henhouse.
I have argued often with people that believe gold is some kind of fixed commodity, it is not. The higher the price goes the more holes people dig looking for the stuff when the value declines people just stop digging. Gold suffers as much as any commodity; people just believe the stuff is rare sort of like the fallacious energy shortage. There is no such thing , the truth is that there is only a shortage of dirt cheap energy. I try and avoid these debates since most of the participants seem to have a belief system that entitles them to make outrageous claims that are beyond testing, much like religion.
So far we have tried any number of economic models with typical failures every 1 or two generations. I suppose any system based on belief without question is bound to collapse when the priests and disciples fade away.
Sometimes I suspect money is a loosely correlated concept to the degree of trust people have for each other. That global trust is falling apart as we speak and the economics will follow. There does not seem to be any way a single government can reestablish basic trust on a global scale. In the 13th century people were freaking out about counterfeiters. Dante reserved a special place in the Inferno for such miscreants because he felt strongly that they were undermining God’s Order. Some of these counterfeiters were basically making less than pure gold coins by small margins. The question that was never answered was whether the States themselves were issuing less than full measure and simply looking for scapegoats. Back then anyone with a smattering of chemistry could be burned at the stake. Inflation is just a less obvious way of devaluing currency.
I doubt it is a zero sum game since there are many examples of people just walking away from the table and starting new systems, the trick is to convince everyone that it is the only game in town.
Vladimyr Ivan Burachynsky Ph.D.(Civil Eng.), M.Sc.(Mech.Eng.), M.Sc.(Biology)
120-1053 Beaverhill Blvd. Winnipeg, Manitoba CANADA R2J 3R2 (204) 2548321 Phone/Fax
-----Original Message-----
Vladimyr, Glen, Glen, money,schoolinwar,"Normal"it wasopen. intellectualrarely pay off the debts of theirfight. Trying to extract ancientthat costs more than it returns.for Athens is said to have saved theProsperity. short lived.discussions. Debtbecause they did notM.Sc.(Mech.Eng.),Blvd.Phone/FaxMessage-----[mailto:[hidden email]] On BehalfSeptember 10, 2010 11:42 AMGrouphearing people claim that any debt the US builds/acquires willpaid (or defaulted on) by "our children and theiroversimplification has always _seemed_ fundamentally wrong to mewrong than just being an oversimplification.the economy is a zero-sum game. Money isn'tlaws that I"m aware of. Granted, there areconserved; but money isn't one of them. So,start reading that will help me a)about debt and b) clarify thisoversimplified argument? I'mwant to find a bit of claritystrikes me that on a personalconserved. E.g. I pile upsticks with me. I eitherthat true at allbooks and popular magazineI need (or perhaps I'mGame Theory I'veargument.http://agent-based-modeling.com============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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This gets right to the heart of the matter, I think. Despite our obvious ability to artificially assert money as a (somewhat) universal metric for value/quality _and_ despite the natural "inertia" provided by indexing the value of lots and lots of various commodities with money, it still all boils down to trust of some kind. One of the benefits of neoliberalism (which I think is called neoconservatism by some folks) is the perspective that the more fluid the system, the better off we all are. I think this is why I've heard people claim that capitalism (I suspect the Austrian economics type you referred to earlier) does _not_ believe the economy is a zero sum game. Their idea seems to be based on an assumption of the open endedness of the universe. The idea that there is no "bottom turtle". As soon as we put some rules into place, "life will find a way" to circumvent those rules. It seems like there are, however, temporal or spatial scales of robust mechanisms of trust. So, while the young may not trust the old and the old may not trust the young, within each group, there is enough validation (the "other" behaves according to the behavior I induce from my samples) for local trust. The same is true of money. So, perhaps it's a case of local: zero-sum, non-local: non-zero-sum? Then again, it could be that I have a hammer and everything looks like a nail to me. ;-) Vladimyr Ivan Burachynsky wrote circa 10-09-10 03:04 PM: > Sometimes I suspect money is a loosely correlated concept to the degree of > trust people have for each other. That global trust is falling apart as we > speak and the economics will follow. There does not seem to be any way a > single government can reestablish basic trust on a global scale. In the 13th > century people were freaking out about counterfeiters. Dante reserved a > special place in the Inferno for such miscreants because he felt strongly > that they were undermining God's Order. Some of these counterfeiters were > basically making less than pure gold coins by small margins. The question > that was never answered was whether the States themselves were issuing less > than full measure and simply looking for scapegoats. Back then anyone with a > smattering of chemistry could be burned at the stake. Inflation is just a > less obvious way of devaluing currency. > > > > I doubt it is a zero sum game since there are many examples of people just > walking away from the table and starting new systems, the trick is to > convince everyone that it is the only game in town. -- glen e. p. ropella, 971-222-9095, http://agent-based-modeling.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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In reply to this post by Vladimyr Burachynsky
For a small-bite consumption of economics look at the blog of Dr
Paul Krugman
professor of finance at Princeton and Nobel Prize winner. He writes a blog and opinion column at the NYT (free access). Read his blog and columns for a month and you will find topical discussions on economics. Over that time you will pick up information about larger economic issues and theory that based on my undergrad and grad training I can say "oh yea, that rings a bell". Its called Conscience of a Liberal. BLOG: http://krugman.blogs.nytimes.com/ Opinion: http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/paulkrugman/index.html He has also written a textbook on economics available at Amazon http://www.amazon.com/Economics-Paul-Krugman/dp/0716771586/ref=sr_1_1?s=books&ie=UTF8&qid=1284158683&sr=1-1 Yes, people will claim, rightly so, that Dr Krugman has a liberal bias. But he presents his opinion and backs it up with data that can be verified or refuted. You can not say that about most of the conservative politicians who rant about what economic policies need to be implemented - even when their *notions* are contrary to established economic cause-n-effect. When he says tax cuts or supply-side economics, which benefit the very wealthy, are failed or will not benefit the current economic malaise, he doesn't claim hurt for the middle or lower economic classes. He provides data showing the policy promoted by conservatives will **not** meet the goal the conservatives are claiming to achieve. He shows the spending/saving/etc patterns of certain groups and why giving them *stimulus* funds will or will not stimulate the economy. If someone finds an equivalent "conservative" economist blog I will add that to the mix to compare. Actually, Dr Krugman references such conservative sites (usually politicians or pundits) who blather claiming they espouse economic policy. Dr K rationally refutes their comments - with facts and diagrams from independent data sources. I took macro econ as an undergrad and a class on the Federal Banking System in grad school (MBA). I have been an investment analyst for 26 years (commercial mortgage loans). So from an econ-theory standpoint I consider myself an "informed consumer" of economic policy discussions, but by no means claim any expertise in economics. Stephen Thompson (lurker) MBA Finance MS Software Engineering On 9/10/2010 5:04 PM, Vladimyr Ivan Burachynsky wrote:
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Stephen Thompson wrote circa 10-09-10 04:08 PM:
> Its called Conscience of a Liberal. > BLOG: http://krugman.blogs.nytimes.com/ Cool! Thanks. I've placed it in my RSS aggregator. Of course, that doesn't mean I'll be industrious enough to actually read it. ;-) But I'll try. Maybe by the 2012 election, I'll have a more fact-informed opinion. -- glen e. p. ropella, 971-222-9095, http://agent-based-modeling.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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Glen, hi,
Many helpful (to me) posts, following on your question. In conversations with Jim Rutt here on similar questions, he recommended the attached summary to me: He claims it is to the point, and factually accurate. I need to read it, but have not yet. All best, Eric ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
Modern_Money_Mechanics.pdf (1M)
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In reply to this post by glen e. p. ropella-2
Gentlemen,
Curiously I recall that the natives of the Canadian West Coast had a culture based on debt. Lavish gifts were presented at potlatches that appeared to court total poverty but the culture seemed to view debt of this type as prestige since the recipient was expected to out do the giver at the next potlatch and was shamed if unable to ante up. Western thinkers concluded that it was a suicidal culture and the Canadian government stopped the practice which is now considered to have nearly destroyed the entire culture. For some reason this social organization survived for centuries without white interference and I have no idea how it stabilized itself and actually created a highly innovative society. There have been many other strange variants on social wealth distribution but I suspect they were indeed local and trust was stabilized which seems to be the key . All systems are based on trust and lack of such spells failure for all systems. Currency is not the basic principle but rather trust which can create any of a multitude of systems.(It could be argued weakly that copper served that purpose until white men arrived with steel) Gold may be an attempt to base a system on the lack of trust. Which is interesting since it depends on it anyway. Experts on game theory please comment, Is the Japanese board game considered a Non-Zero sum game? Vladimyr Ivan Burachynsky Ph.D.(Civil Eng.), M.Sc.(Mech.Eng.), M.Sc.(Biology) 120-1053 Beaverhill Blvd. Winnipeg, Manitoba CANADA R2J 3R2 (204) 2548321 Phone/Fax [hidden email] -----Original Message----- From: [hidden email] [mailto:[hidden email]] On Behalf Of glen e. p. ropella Sent: September 10, 2010 6:17 PM To: The Friday Morning Applied Complexity Coffee Group Subject: Re: [FRIAM] national debt and zero-sum games Stephen Thompson wrote circa 10-09-10 04:08 PM: > Its called Conscience of a Liberal. > BLOG: http://krugman.blogs.nytimes.com/ Cool! Thanks. I've placed it in my RSS aggregator. Of course, that doesn't mean I'll be industrious enough to actually read it. ;-) But I'll try. Maybe by the 2012 election, I'll have a more fact-informed opinion. -- glen e. p. ropella, 971-222-9095, http://agent-based-modeling.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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In reply to this post by David Eric Smith
I recall an undergrad chemistry professor at the Univ of Minn who after several minutes of absorbed lecture and diagramming on the chalkboard would half-turn and say "...is that right?" Then he would theatrically sigh out loud and say".. I'm used to discussions with graduate students. You are all freshman...of COURSE its right, I'm TELLING you its right!". We chuckled as he turned and plunged into the next topic. Eric's summary looks to be quite detailed on the concepts of M1and other definitions of money supply - and how money flows through the banking system. I have only read the first two pages. Metaphorically, I am back in the undergraduate auditorium scribbling notes as Professor C. F. Reserve turns and with head half-tilted exasperatedly signs, "..of course its right..." Steph T On 9/10/2010 7:14 PM, Eric Smith wrote: Glen, hi, ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
Re: national debt and zero-sum games
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In reply to this post by glen e. p. ropella-2
Thanks Robert C On 9/10/10 10:42 AM, glen e. p. ropella wrote: I keep hearing people claim that any debt the US builds/acquires will have to be paid (or defaulted on) by "our children and their children". This oversimplification has always _seemed_ fundamentally wrong to me ... more wrong than just being an oversimplification. It doesn't seem to me like the economy is a zero-sum game. Money isn't subject to any conservation laws that I"m aware of. Granted, there are economic drivers that are conserved; but money isn't one of them. So, what literature do I need to start reading that will help me a) understand what is and isn't conserved about debt and b) clarify this point to those who insist on making the oversimplified argument? I'm not convinced one way or the other; I just want to find a bit of clarity around this soundbite. In particular, it strikes me that on a personal scale (time and distance), money is mostly conserved. E.g. I pile up credit card debt or buy a house and that debt sticks with me. I either have to pay it off or default (or die). But is that true at all scales? I've spent some time looking at generic books and popular magazine articles on economics. But they lack the clarity I need (or perhaps I'm too thick to understand them). And the sources for Game Theory I've seen are too idealistic to get any real traction for an argument. Thanks. ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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Sorry if I'm beating a dead horse... I think I saw it move. I'm still trying, in my own lazy way, to figure this out. Here's Warren Buffett: "You can't go broke if you issue debt in your own currency." "If Greece could print its own currency, you might have enormous inflation, but you'd never have a default on debt now." http://www.youtube.com/watch?v=eA68Kl77gzE My gut tells me this isn't quite true... or there are details he's leaving out. -- glen e. p. ropella, 971-222-9095, http://agent-based-modeling.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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In reply to this post by Robert J. Cordingley
Glen,
He is correct, with one unspoken addition: You can't go broke if you can print your own money AND the creditor will accept it. If you have a bookie who accepts RopellaBucks and pays in green backs, you will be good forever! If Greece can borrow dollars and pay in their own currency, same deal. I'm not sure how international borrowing works, but eventually someone will stop accepting your currency if it has devalued too much. At some point after that, other people will stop trading for it too, so you won't even be able to convert your RopellaBucks into usable currency. Then, in the long run, you might be even more screwed than the semi-screwed you are in the short run from being stuck on the Euro, with no ability to escalate printing. Eric On Thu, Oct 7, 2010 02:14 PM, "glen e. p. ropella" <[hidden email]> wrote: Sorry if I'm beating a dead horse... I think I saw it move. I'm still trying, in my own lazy way, to figure this out. Here's Warren Buffett: "You can't go broke if you issue debt in your own currency." "If Greece could print its own currency, you might have enormous inflation, but you'd never have a default on debt now." http://www.youtube.com/watch?v=eA68Kl77gzE My gut tells me this isn't quite true... or there are details he's leaving out. -- glen e. p. ropella, 971-222-9095, http://agent-based-modeling.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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Excellent point. For whatever reason, I hadn't explicitly formed that minor premise: "somebody has to credit the debt". That seems like a pretty big minor premise to the syllogism to me. Of course, there are lots of reasons you might loan to someone who has little chance of paying you back _if_ you've got the extra cash to do so. Control/power is the obvious reason. Thanks. ERIC P. CHARLES wrote circa 10-10-07 12:50 PM: > Glen, > He is correct, with one unspoken addition: You can't go broke if you can print > your own money AND the creditor will accept it. > > If you have a bookie who accepts RopellaBucks and pays in green backs, you will > be good forever! If Greece can borrow dollars and pay in their own currency, > same deal. > > I'm not sure how international borrowing works, but eventually someone will > stop accepting your currency if it has devalued too much. At some point after > that, other people will stop trading for it too, so you won't even be able to > convert your RopellaBucks into usable currency. Then, in the long run, you > might be even more screwed than the semi-screwed you are in the short run from > being stuck on the Euro, with no ability to escalate printing. -- glen e. p. ropella, 971-222-9095, http://agent-based-modeling.com ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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As I recall, Russia's worst economic problem in the mid-1990s was that
the ruble's convertibility was as bad internally as externally. I've just finished reading Liaquat Ahamed's Pulitzer Prize-winning "Lords of Finance: The Bankers Who Broke the World" (Benjamin Strong, Montagu Norman, Emile Moreau & Hjalmar Schacht). Fascinating read on the years just prior to WW1, the consequences of Versailles, the mirage of the Gold Standard and the go-go years leading to the Great Depression. Interestingly enough, Germany just made its final Great War reparation payment last month. Scott On Thu, Oct 7, 2010 at 3:34 PM, glen e. p. ropella <[hidden email]> wrote: > > Excellent point. For whatever reason, I hadn't explicitly formed that > minor premise: "somebody has to credit the debt". That seems like a > pretty big minor premise to the syllogism to me. Of course, there are > lots of reasons you might loan to someone who has little chance of > paying you back _if_ you've got the extra cash to do so. Control/power > is the obvious reason. > > Thanks. > > ERIC P. CHARLES wrote circa 10-10-07 12:50 PM: > > Glen, > > He is correct, with one unspoken addition: You can't go broke if you can print > > your own money AND the creditor will accept it. > > > > If you have a bookie who accepts RopellaBucks and pays in green backs, you will > > be good forever! If Greece can borrow dollars and pay in their own currency, > > same deal. > > > > I'm not sure how international borrowing works, but eventually someone will > > stop accepting your currency if it has devalued too much. At some point after > > that, other people will stop trading for it too, so you won't even be able to > > convert your RopellaBucks into usable currency. Then, in the long run, you > > might be even more screwed than the semi-screwed you are in the short run from > > being stuck on the Euro, with no ability to escalate printing. > > > -- > glen e. p. ropella, 971-222-9095, http://agent-based-modeling.com > > > ============================================================ > FRIAM Applied Complexity Group listserv > Meets Fridays 9a-11:30 at cafe at St. John's College > lectures, archives, unsubscribe, maps at http://www.friam.org ============================================================ FRIAM Applied Complexity Group listserv Meets Fridays 9a-11:30 at cafe at St. John's College lectures, archives, unsubscribe, maps at http://www.friam.org |
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In reply to this post by Eric Charles
>He is correct, with one unspoken addition: You can't go broke if
you can print your own money AND the creditor will accept it.
>If you have a bookie who accepts RopellaBucks and pays in green backs, you will be good forever! If Greece can borrow dollars and pay in their own currency, same deal. 1) This is a compelling argument for a return to the Gold Standard. 2) Substitute "UncleSam" for "Ropella" and add the following "walk softly and carry a big stick to beat up weak nations and then compel them to buy little sticks to 'defend' themselves which they must pay for in Ropella (sorry US) bucks". On Fri, Oct 8, 2010 at 1:20 AM, ERIC P. CHARLES <[hidden email]> wrote:
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That is the main reason that there was a Gold Standard in the first place and it did work a hundred years ago. But the Gold Standard became a completely inadequate and illusory means of providing currency stability in the decade following World War I. Clinging to it was certainly a factor in the collapse of the world's economies in the early 30s As alluring as a return to it might seem, it would be a hundredfold less adequate now. Scott Sent from my iPhone
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