Less Economic and Financial Market Volatilty With the Fed than Without

[Kimura]

Wait, are people here actually arguing for a return to the gold standard?

Really they are --we get it all the time on these threads. Like Kimura was saying they actually try to argue that prices were more stable with gold!

According to to Takeastepback, we don't understand what a REAL gold standard is about, we're all a bunch of evil statists. I'm assuming he's referring to Rothbard's 100% gold standard.

Click here for Rothbard LOLZ

 

[TakeAStepBack]

Correlation doesn't mean causation but we do know what the cause is. We know that a static money supply makes the economic cycle more destructive.

There has never been a static money supply. It's a false premise.

You're welcome.

 

[Kimura]

And yet you stil put forth logical fallacies and historical inaccuracies on the subject like it's your job. You might want to take a few refresher courses. I'd choose a better school too. Or perhaps you're just a bit slower than others.

Logical fallacies? Historical inaccuracies?

A) The Panic of 1819
B) The Panic of 1825
C) The Panic of 1837
D) The Panic of 1847
E) The Panic of 1857
F) The Panic of 1866
G) The Panic of 1873
H) The Panic of 1884
I) The Panic of 1890
J) The Panic of 1893
K) The Panic of 1907
L) The Great Depression

All of the panics of the 19th century were under the gold standard which were promptly followed by corresponding recessions and/or depressions.

Wait....correlation does not imply causation.

1) You suck at history.
2) You suck at economics
3) Clearly you do not know what a gold standard is
4) All of those panics were the result of government meddling in monetary affairs.


Seriously. You fucking suck at history and eonomics, dude. Try again. Use real history. Understand the gold standard. Understand when it took place in the US. Understand that correlation does not imply causation.


Or, entertain me with you ignorance.
Either one is fine by me.

 

[Bombur]

Correlation doesn't mean causation but we do know what the cause is. We know that a static money supply makes the economic cycle more destructive.

There has never been a static money supply. It's a false premise.

You're welcome.

An absolutely static supply of money is an extreme but it still establishes the relationship between money supply and the economy. You are trying to deny causation but when the cause is so well known it is not really working for you.

 

[TakeAStepBack]

Wait, are people here actually arguing for a return to the gold standard?

Really they are --we get it all the time on these threads. Like Kimura was saying they actually try to argue that prices were more stable with gold!

Gold Standard: The Concise Encyclopedia of Economics | Library of Economics and Liberty

Between 1880 and 1914, the period when the United States was on the “classical gold standard,” inflation averaged only 0.1 percent per year.

http://research.stlouisfed.org/publications/review/95/09/Deflation_Sep_Oct1995.pdf


is right......

 

[TakeAStepBack]

Correlation doesn't mean causation but we do know what the cause is. We know that a static money supply makes the economic cycle more destructive.

There has never been a static money supply. It's a false premise.

You're welcome.

An absolutely static supply of money is an extreme but it still establishes the relationship between money supply and the economy. You are trying to deny causation but when the cause is so well known it is not really working for you.

You do not have causation with the implied correlation. Hence the logical fallacy.

 

[Kimura]

Correlation doesn't mean causation but we do know what the cause is. We know that a static money supply makes the economic cycle more destructive.

There has never been a static money supply. It's a false premise.

You're welcome.

A gold standard is inherently a fixed exchange rate policy. The government perpetually offers to purchase or sell gold at a fixed price.

The ideological argument is whether we want the currency to operate as an investment or savings instrument, or a mechanism we can utilize to provision government and maximize economic output. Market economies will not allow you to set the price of both minus a shit in value, which will result in purchasing one and running short of the other. By the same token, we can't reach full employment and gold price stability if we see changes relative to both.

 

[TakeAStepBack]

Logical fallacies? Historical inaccuracies?

A) The Panic of 1819
B) The Panic of 1825
C) The Panic of 1837
D) The Panic of 1847
E) The Panic of 1857
F) The Panic of 1866
G) The Panic of 1873
H) The Panic of 1884
I) The Panic of 1890
J) The Panic of 1893
K) The Panic of 1907
L) The Great Depression

All of the panics of the 19th century were under the gold standard which were promptly followed by corresponding recessions and/or depressions.

Wait....correlation does not imply causation.

1) You suck at history.
2) You suck at economics
3) Clearly you do not know what a gold standard is
4) All of those panics were the result of government meddling in monetary affairs.


Seriously. You fucking suck at history and eonomics, dude. Try again. Use real history. Understand the gold standard. Understand when it took place in the US. Understand that correlation does not imply causation.


Or, entertain me with you ignorance.
Either one is fine by me.

Dead serious, Poindexter. Clearly you severely flunked economic history. Or you wouldn't make such stupid claims. Then again, you're a chartilist.

 

[Flopper]

I have no idea if the Great Fiat Monetary Experiment ends well or not. But what we do know is that the economy and financial markets have been less volatile under the Federal Reserve system than prior to its creation in 1913.

The table below, taking from a presentation Professor Reinhart gave last Friday, shows the track record of the nine systemic financial crises the United States has experienced in the last two centuries. It lists total peak-to-trough decline in per-capita gross domestic product following a systemic financial crisis, the time it takes for a country to “snap back” to its precrisis peak and whether there was a double-dip recession, among other data points.

http://economix.blogs.nytimes.com/2014/01/07/200-years-of-american-financial-crises/?_r=2

One of the reasons we have monetary policy is to eliminate the boom and bust in the economic cycle. There has always been much dispute about the effectiveness of monetary policy. It does seem that monetary has smoothed out the cycles but the Fed has missed the boat a number of times with all their fine tuning.

 

[TakeAStepBack]

One of the reasons we have monetary policy is to eliminate the boom and bust in the economic cycle.

And yet the federal reserve has created boom and bust business cycles like it was one of their tasks under the charter. It's been on after the other, after the other and on and on...

 

[Bombur]

One of the reasons we have monetary policy is to eliminate the boom and bust in the economic cycle.

And yet the federal reserve has created boom and bust business cycles like it was one of their tasks under the charter. It's been on after the other, after the other and on and on...

Are you serious?

 

[TakeAStepBack]

Every seven years like clockwork the Fed fucks up the economy. But apologists blame the gold standard for volitility, unstable prices, recession, panics, etc...


Comical, no doubt.

 

[TakeAStepBack]

One of the reasons we have monetary policy is to eliminate the boom and bust in the economic cycle.

And yet the federal reserve has created boom and bust business cycles like it was one of their tasks under the charter. It's been on after the other, after the other and on and on...

Are you serious?

I'm dead serious. Have you been living under a rock?

 

[Kimura]

One of the reasons we have monetary policy is to eliminate the boom and bust in the economic cycle.

And yet the federal reserve has created boom and bust business cycles like it was one of their tasks under the charter. It's been on after the other, after the other and on and on...

The Austrian Business Cycle Theory is completely and utterly false. Try again. A natural rate of interest simply has no basis in reality outside of the ideashphere of Austrians and their fetish with some imaginary state of general equilibrium.

Capital theory, as one of the foundations of the Austrian Business Cycle, is also incorrect. This whole idea that capital goods can be labeled into some one size fits all orders and separated from consumer goods output is suspect at best.

Thirdly....oh wait, I can't speak about ABCT because I haven't taken a course at Mises.org Pardon me...

 

[Zander]

Q-What is backing the US Dollar $$?
A- The full faith and credit of the US Treasury!

Q- Ok, but what does that mean?
A- The US Dollar is backed by US Treasury Bonds.

Q-What is backing the bonds?
A- US Dollars $$.

Q-What could go wrong?

Three economists went out hunting, and came across a large deer. The first economist fired, but missed, by a meter to the left. The second economist fired, but also missed, by a meter to the right. The third economist didn't fire, but shouted in triumph, "We got it! We got it!"

 

[Bombur]

And yet the federal reserve has created boom and bust business cycles like it was one of their tasks under the charter. It's been on after the other, after the other and on and on...

Are you serious?

I'm dead serious. Have you been living under a rock?

Wow... just wow.

 

[Kimura]

Q-What is backing the US Dollar $$?
A- The full faith and credit of the US Treasury!

Q- Ok, but what does that mean?
A- The US Dollar is backed by US Treasury Bonds.

Q-What is backing the bonds?
A- US Dollars $$.

Q-What could go wrong?

Treasuries and dollars are essentially the same thing since both are liabilities of the federal government and assets of the non-government. Treasuries are nothing more a bunch of dollar deposits at the FED. In other words, our national debt is actually savings or equity.

 

[JimmieD]

You do not have causation with the implied correlation. Hence the logical fallacy.

It wouldn't be a logical fallacy if your hypothesis is:

Ha: The federal reserve has increased market volatility.

You could look at market volatility before the creation of the Fed and after the creation of the Fed and determine if it was at least an obviously false hypothesis, though you may not be able to look and conclude the hypothesis is true.

If there is less market volatility after the creation of the Fed than before, then we could conclude that the hypothesis is false. The argument can take the form of a Modus Tollens argument:

1) P -> Q
2) -Q
3) Therefore, -P

1) The existence of the Fed (P) increases market volatility (Q)
2) Market volatility did not increase after the Fed (-Q).
3) Therefore, the existence of hte Fed does not increase market volatility (-P).

 

[Kimura]

You do not have causation with the implied correlation. Hence the logical fallacy.

It wouldn't be a logical fallacy if your hypothesis is:

Ha: The federal reserve has increased market volatility.

You could look at market volatility before the creation of the Fed and after the creation of the Fed and determine if it was at least an obviously false hypothesis, though you may not be able to look and conclude the hypothesis is true.

If there is less market volatility after the creation of the Fed than before, then we could conclude that the hypothesis is false. The argument can take the form of a Modus Tollens argument:

1) P -> Q
2) -Q
3) Therefore, -P

1) The existence of the Fed (P) increases market volatility (Q)
2) Market volatility did not increase after the Fed (-Q).
3) Therefore, the existence of hte Fed does not increase market volatility (-P).

That was a trip down memory lane.

 

[Toro]

banking panics and recessions/depressions every decade a resounding success

Since we're doing logical fallacies, every decade beats the every 7 years mark under the FR.

Correlation does not imply causation!