They don’t say anything about how the rich skip welfare does that make sense to you that the rich get money from government does it make sense to you that the nonprofit is actually a conspiracy to profit the rich and collect money from you everything in this society is now about making the rich richer and the poor poor and they have propaganda people that tell you that a flat tax is the way to go and plunder tax which is what graduated in the tax system up to tax more from the rich and stop taxing the poor which is under $2 million support the plunder tax worldwide billionaires left India they say that the East Indian jeweled class princes are now taking care of the poor in India but if you see piles of bodies burning in India it will be because of Socialism not free enterprise it will be socialism that will destroy America not free enterprise capitalism is what the rich want for themselves and they want you in abject poverty by way of taxing the middle-class out of existence and keeping the poor poor and keeping capitalism for themselves their brainwashing you
Both political parties are controlled by the rich billionaires the billionaires want socialism for you and all the lower classes and capitalism for them selves corporate schism is a blameless system so that if they do something that hurts other people they don’t take responsibility for causing it problems for other people including his death the alternate problem is Steve Scott free
Both political parties are controlled by the rich billionaires the billionaires want socialism for you and all the lower classes and capitalism for them selves corporate schism is a blameless system so that if they do something that hurts other people they don’t take responsibility for causing it problems for other people including his death the alternate problem is Steve Scott free
@@user-zu1ix3yq2w Why? How? Who said that? Monetary system is just man-made system not even nature's made. Surely it just a manipulation by the few to steal the remaining money in our pocket. It doesn't even follow the law of nature and logic.
@@finchbevdale2069 I see those 3 classifications as pretty much the same, as they either are an individual, or simply a group of individuals acting together. I expect that most people will act according to what they see as their rational self interest. If their's happens to align with mine, then there is some trust there. For there to be any kind of society at all, there has to be at least some trust. In the case of the groups I mentioned in my comment, an assumption of their desire for my wellbeing is somewhat irrelevant to my trust for them.
Yes, that was the original definition of inflation (a growth in the money supply). But economics texts haven't used that definition for three quarters of a century now. The definition within economics is, a growth in the average price level. When we need to talk about a growth in the money supply, we simply say, "growth in the money supply."
@@AntonyDavies Seems like that was a trick to confuse us. Higher prices due to supply and demand and changes in tastes is just economics. Inflation is higher prices because there are more dollars chasing the same amount of wealth.
@@AntonyDavies Redefining inflation that way instead of creating a definitive phrase to handle specifics is detrimental. It means we create an unnecessary shifting context both over time and with rational definitions between each other. It would've been more optimal for the understanding of the language to be specific when it needs it and to not defer to redefining words unnaturally. It also is a suspicious act redefining existing words like that since intentional definition shifting tends to mean someone is hiding something behind the original definition. Natural language evolution will not generally redefine words in such a way.
@@Spartan322 I don't disagree. But as the redefinition occurred over 50 years ago, all of modern economic literature has used the definition "an increase in the average price level." There's no confusion among economists as they understand the mechanisms behind the words. But attempting to revert to the old definition causes no end of confusion among non-economists.
Outstanding simple and quick explanation of a lot of economics. This should be mandatory watching for all high school students so they can get at least a basic understanding of basic economics
Prof. Davies is always so informative and easy to follow. I'm sure most people didn't know about the beebop tidbit, but I actually didn't know about why there was such a delay in detecting the inflation induced by COVID stimulus.
I wondered as well. All that stimulus money, but where was the inflation? I saw a video several weeks ago on Patrick Bet-David's channel: Michael Saylor, paton saint of bitcoin. I found his insight on inflation startling. I'm no scholar, and this is only a poor paraphrase of it, but essentially he said the inflation hit the stock market first. When we finally ramped up our goods and services again - then inflation leaked into the marketplace. I don't know it it's possible, but I was certainly intrigued
Inflation increases when the rate which money is circulated is faster than the rate which goods and services are distributed in the economy. When COVID stimulus enters the economy, while there is an increase in supply of money, the circulation of money decreased because people don't have a way to spent money during lockdown outside of financial instruments. So if you follow CPI, you will see that inflation rate dropped in 2021 after the release of stimulus in 2020. However, after the economy re--opened in 2022, the inflation start to go up. Not to mention governments continue to stimulate the economy to "speed up covid recovery" when opening up the economy and that unfortunately is a direct addition to inflation.
Good video! My only disagreement here is Russia's effect on oil/gas prices here in the US since they really comprise only maybe 3% of our imports. I'd say that the primary driver of our oil and gas prices here and now are due to the fact that we shut down our own supplies and import more. Now THAT is definitely the direct fault of our current administration.
To be fair, the amount of oil we import from Russia doesn’t necessarily mean that much. Almost all of Europe depended on Russian Oil, that is obviously going to have an effect on prices in the US. Supply has been limited world wide so it makes sense that prices would rise for the US, even if we didn’t directly depend on Russian Oil. That being said, I agree with you, we were had net exports like two years ago and now we clearly have limited supply even before the whole Russia thing.
Thanks for your comment! Here is not talking only about 3%, the existing situation between Russia and Ukraine conditioned increase of oil and gas prices in the world. And this influences inflation because the USA is the importer of them.
@@LearnLiberty Yes, surely it has exacerbated the situation but we must likewise acknowledge that prices began to rise significantly before the conflict due to the shutdown of our own supplies.
Oil is also priced in a futures market, so it's not necessarily current supply that matters but what people think the supply will be over the next period. This also means if the us government released new off shore drilling permits the prices would soon go down even though no new oil could be got from those wells for like 5 years. This already happened in 08 when the Bush administration released off shore permits. The price of oil plummeted from 145 a barrel to like 60 a barrel the month following the permits.
"...as long as everybody is expecting the inflation..." Inflation is ALWAYS a negative. And those calculations you refer to are people's time and money that could have been better used on productive things.
That's the core of how it works.. Most people don't want to trade their time for future value. That's alright, because inflation is going to steal the value of your time anyway.
Inflation is a natural result of market use, as a money supply inflates, which happens naturally with new bodies introduced into the supply as more revenue enters the market, inflation will naturally happen. (as that's what inflation actually is) The problem has to do with artificial manipulation of this natural phenomenon.
Thank you! The idea that it's neither good nor bad that our work is worth less (especially when wages are negotiated so much less frequently than the price of goods and services) is obscene.
@@g.l.holdren162 Its not obscene, its literally a natural part of the market, people who think even a gold or gold-backed fiat currency doesn't inflate are obscene, what do you think happens when someone generates wealth? It will add money to the money supply which is literally what inflation is, all wealth generation will inflate a currency.
"Even an economy comprised entirely of saints will experience inflation, if the money supply grows faster than the economy." Real words of wisdom! (2:16)
Eh, mute point. A society of saints (taken as those with knowledge and benevolence) will not print more than than necessary, they would strive for 0 and err on the side of -, so that their money will always be worth as much or more than then as time goes on. Also, with the ability to deal with numbers on miniscule orders of magnitude it would not be unreasonable to stay entirely deflationary (eventually people would operate in millimoneys, micromoneys, ect) such of that as a gold standard or mathematical cap.
I always look forward to the videos of Prof. Antony Davies. We need more people like him to spread these ideas. I see all these videos and how intelligently he speaks and I'm surprised they don't have like 10M views.
A appreciate Dr. Davies' insight here, but I am left with so fundamental questions: What is the precise relationship between the US federal government and the private Federal Reserve system? Is the Federal Reserve COMPELLED to print enough money to cover the US Congressional budget? Under what authority? Why would a private entity be beholden to the Congress in this way? Is the dilution of the dollar by overprinting solely at the discretion of the Federal Reserve? What does an American dollar actually represent? I have asked many people who claim to know these questions, and have never gotten a concise answer. Thanks for the meaningful content.
"Is the Federal Reserve COMPELLED to print enough money to cover the US Congressional budget?" This is an interesting question. Legally, the Fed is independent and so can alter the money supply as it wishes. Practically, Congress has backed the Fed into a corner. To fight inflation, the Federal Reserve needs to raise interest rates. But, the federal debt has become so large that the federal government can't afford for interest rates to rise because each one percentage point rise in interest rates costs the federal government an additional $300 billion a year in interest expense (for perspective, that's almost one-half of the entire Department of Defense budget). So, the Fed now finds itself having to choose between what's good for the people (keeping inflation under control) and what's good for the federal government (and, by extension, the people who rely on the federal government) by constraining its interest expense.
@@finchbevdale2069 said... "The federal reserve is an agent of the treasury..." That's incorrect. The two organizations do work together, but they are separate. Treasury is under the Executive branch. The Fed is independent, but was created by, can be dissolved by, and reports to Congress. " The government issues the currency. It can't run out of dollars." That's incorrect. The Fed, which is (at least nominally) independent of the government issues the currency. The Treasury does the physical printing of the money, but it only does so on the instruction of the Fed. Yes, the Fed can't run out of dollars, but that's irrelevant. What's relevant is the purchasing power of those dollars. And there, the more dollars the Fed prints, the more it erodes the purchasing power of existing dollars. "It can cause inflation by buying more stuff than is available in the market and thus bidding up prices over time..." That's not inflation, but a change in relative prices. For example, if the money supply is constant and the government starts buying up oil, the price of oil will rise, and the prices of things made with oil (like gasoline) will rise. However, because the money supply is constant, the average price level won't change. That is, people will react to the greater cost of gasoline by cutting back on their purchases of other things. In turn, that will cause the prices of those other things to fall. In the end, what you've done is to alter the price of oil and gas relative to other things, but you haven't altered the average price over all things. The way to do that is to increase the money supply.
@@generalsalami8875 I might have to listen to more of his content. And to be fair there probably are few economists that can explain things in a way the average person can understand so maybe the point is more reasonable that what I first suggested.
Apparently, nobody has any idea what inflation is either. It is NOT rising prices. An apparent rise in prices is a consequence of inflation, NOT inflation itself. Inflation is one thing, and one thing only ---> an increase in the supply of money.
The computer industry is interesting as an example. One major factor in people's purchasing decisions is obsolescence. A modern computer is almost useless in about 5 years due to a combination hardware improvements and software built with the expectation of greater performing hardware (meaning it need not manage hardware resources as efficiently, sometimes just due to not wanting to invest in performance but also because of creating additional features or fancier graphics). The result is that a computer has a relatively short shelf life, which continually drives people to upgrade if they don't want to be stuck with out of date software (which has its own set of rather large drawbacks).
The price of some objects go up but others go down in price, but the caveat is that the size shrinks. A KFC piece of chicken in the 60's was 3 times bigger than today. That's shrinkflation, IMO. BTW, I ate at KFC then and now.
It could be argued that whether something has intrinsic value has to do with how small the probability is that circumstances will change enough that no one wants it. Outside of things like jewelry gold still has functional value in electronics and metallurgy. I would argue that the chances that gold will be worth nothing in the future is smaller than the chances of the US dollar being worth nothing in the future. But I will concede the point that there isn't any one thing that can't become worthless.
So "nothing has intrinsic value"... food and water don't? In a pure barter system, eventually someone is trading for food, to eat... so they can survive and that has intrinsic value. I would think. Other than this question, I'm standing applauding screaming encore! What a phenomenal lesson! Learned a lot and the professor explained in such a way that makes it easy to understand.
"food and water don't?" Subjective value means nothing has intrinsic value, its an agreed upon value based on demand, necessity creates value based on how necessary it is and the willingness for one to pay the price. One person might think of food and water as something easy to achieve in a tropical or temperate environment, say a single cup of water is $0.50 but someone in a desert will treat that same cup of water as worth say a hundread times at $50. This is how we know nothing has intrinsic value as no good or service is valued at the same price in all regards. Subjective value invalidates any concept of intrinsic value economically.
Thanks for the comments! Subjective value doesn't mean that food and water aren't valuable. It means that they are only valuable in as much as they are valuable *to someone.* That is, the value comes from the person's reaction to the product, not from the product itself. For example, once upon a time, whale oil was extremely valuable as a fuel source. The value lay not in the whale oil, but in the benefit people received from using the whale oil. Now that we heat with other things, whale oil is far less valuable - despite the fact that whale oil today is no different than it was 200 years ago. What caused the change in value was us, not the whale oil. The value is subjective, not objective.
This is kind of philosophical because it comes down to what it means to have value. Of value to whom? Which by definition makes it subjective. When people talk about gold, etc. having intrinsic value, don’t they just mean it has uses outside a means of exchange? Gold does have uses outside a means of exchange which distinguishes it from paper money, even if the term “instrinsic value” is technically wrong. It’s value is still to people, but some its value is in its ability to be used in shiny rings or circuit boards, and some is in its ease of use for exchange.
@@claudimc Fiat money has value beyond its use as a medium of exchange, to some extent. It can be used to snort a white substance, and in Weimar Germany people burned it for warmth, or glued it to the wall as wallpaper. Gold has more non money uses, and they are better uses, but most things have more than one use, making their value very subjective to what you are using them for.
After the atomic apocalypse, and the Rock people land on Earth to visit the ruins, what intrinsic value will water and food have, if they don't eat or drink it ? All value depends on the one valuing the item, and if they don't value it, then it has no value, because ALL value is subjective.
The answer for Myth 7.5 is what I've been reaching for when trying to explain Bitcoin to folks. It's not about intrinsic value. It's about supply restrictions.
Yeah, I get what the Professor is trying to say here, but in an apocalyptic situation, food, fuel, and Guns will have more value than Bitcoin. In the current civilized circumstance, Bitcoin can be said to have value, but what can you use Bitcoin to manufacture or what can you do with it when a better Decentralized Ledger comes along? At least with physical metals or commodities, there’s little likelihood of those things completely losing their value to most of humanity.
Apparently only 11% of gold produced is used for manufacturing or industrial purposes. If that is true 89% goes toward increasing the supply of gold used as a store of value.
If only each class was like this. 5-10 minutes on a specific topic, go next class. College would be much cheaper and students would have much more free time
On Friedman's proposal--increasing money supply in step with real economic growth--I have two questions: who gets the money first (Cantillon)? If the economy shrinks in real terms, how can the correct amount of money be removed from the economy, and who will it be taken from?
Good question. In practice, the government gets it first. That means that the government gets to spend the new dollars before the ensuing inflation eats away at their value.
Regarding inflation rate not mattering if it’s expected, I remember being taught this and not really grasping it. When inflation is high, it seems like riskier investments have higher real rates of return than low risk. Is that true, or does it only appear that way because we’ve never really been through a period of high inflation where it was expected to stay high for a long period of time? If it is true, then inflation rate would matter because it would shift investment incentive from low to high risk, and also be unfortunate for people who have a low tolerance for risk like those with lower income and the elderly. This definitely seems to be true in the transition period. We’ve had high inflation for quite a few months now and savings account interest rates (with no term commitment) are only now starting to climb above 2% or so. Is this just because no one believes inflation will stay high? Why does that matter for accounts with no term commitment?
Excellent presentation with a common-sense approach to explaining inflation economics. Had the Public School System continued to teach Civics, our society would have a better understanding of its causes and effect and be less gullible to the spin of the politicians that fuel the blame on everything other than their spending of money that they don't have causing the Fed to put more dollars in circulation. Ask Venezuela how inflation has been working out for them.
Nice content! The best way to find that balance between saving and living is by investing, this way you get to have your savings intact and then live comfortably of the revenue coming in from your investments.
Successful people don't become that way overnight. What most people see at a glance wealth, a great career, purpose is the result of hard work and hustle over time. I pray that anyone who reads this will be successful in life .
I would advice cryptocurrency on my own side it's been very profitable using expert guide and amazing strategies, I call crypto the future but selfishness and greed have prevented many and they ended up suffering huge losses.
"Myth 0: Money matters" Exactly right, the primary and only function of money is to facilitate commerce. Currency does not have intrinsic value, it is valuable because it performs the functions of money and does it well. We stopped using gold coins because of the portability problem, we may well stop using dollars because of inflation. Even further down the road we might abandon Bitcoin because of a divisibility problem. None of this actually matters, so long as there continue to be goods and services people want and a currency available to buy them with.
It will given enough time. Only a fixed amount of Bitcoin can ever be mined, so through attrition the amount in circulation will eventually decrease even as the population increases. Will this be the thing that kills Bitcoin? I dunno, it certainly isn't a problem *right now* and it's still an open question whether or not Bitcoin is going to outcompete everything else. I was just trying to make the point that no currency lasts forever.
@@AusFirewing if divisibility threatens the value of bitcoin, they will simply increase its divisibility. It is possible (worst case) that there is a hard fork, and an offshoot of "bitcoin classic" that still has the divisibility issue, but the vast majority of the network and the value will increase divisibility if necessary.
@@AusFirewing if bitcoin is to be abandoned, it is far more likely to be because of spendability or privacy issues, or because our grandchildren invent something we can't yet imagine.
An increased employer benefit is only good if you make use of the benefit, whereas any increase in wages is sure to benefit you. If you don't need better healthcare, higher life insurance, child care, etc.... all those benefits are wages you don't get while others do.
At the outset he says that the rise in price of one thing or another is not "inflation" and explains why in plain terms. Then he says that "inflation" is the "rise in the average price level." But is that correct? Or is it more accurate to say that "inflation" is the decline in the value of money, and that the rise in the average price level is the MEASURE of the inflation rate?
Very good observations and explanation of the situation during covid. It is pity more politicians do not take notice of this understanding of inflation in the economy by realising that the increased money supply does not always show as inflation due the lack of understanding of how inflation is currently measured and not noticed.
Inflation (and deficits) are about the same under both parties. So, parties aren't the answer. A major component of the answer is a federal government that has broken through its original Constitutional constraints.
More people need to see this vidoe, LOTS more people! So many fallacies busted. Even today, too many people think corporate greed is the cause of price inflation, and some politicians are encouraging this belief. So yes, we CAN blame politicians for inflation, or at least for misinforming people about inflation. And of course, it took both Congress and the president to create the Federal Reserve Bank in the first place, back in 1913. And an especially good point about whether or not money matters. While it obviously does, because monetary inflation leads to price inflation, what I like to say is that wealth is not money, but goods and services. Money is simply a tool we use to exchange goods and services. Changes in the monetary supply are simply affecting the use of that tool, and the relative value of goods and services. But yeah, value is always a subjective phenomenon; people place value on things, there is no intrinsic value in anything. Not even things humans truly need like food and water. Humans simply place high value on food and water because we need them. But the relative values of different types of food can change dramatically under different circumstances.
The original (and true) definition of the word "inflation" was "An unwarranted increase in the money supply, leading to increasing price levels". That was understood as raising the ratio of money in circulation to amount of goods and services in the marketplace (GDP). Revising that definition to "rising prices' led to mass ignorance and misunderstanding.
The Fed gives us the definition of inflation and what is causing it. Then traders and investors suffer the consequences of not understand. The lag problem is the difficult part of trading because it feels like you're trading a fake market. Really love you video thank you for sharing.
@@LearnLiberty I have a question. In health care. What if someone had car accidents ,and was unconsciousness? In that case u won't Shop around looking for best treatment instead u look at near hospital. And they price will charge u higher, because u can't able to refuse treatment it in that situation,or u won't negotiate with hospital. In that case does free market in health care work? Could you please answer my question
@@whatsup3519 Insurance is one the many metrics the free market developed to eliminate the concept of "inelastic demand" naturally. (the concept of inelastic demand is actually fallacious because its hinged on the belief that said demand can't be account for as if we're not allowed to think for the future which is utter nonsense) It doesn't need to be accounted for outside of the market itself but the government has been heavily involved in regulating, subsidizing, and otherwise interfering in the healthcare market and most especially in insurance that it is impossible for competition in said market to take place. It doesn't help that they have in all practicality banned any capability of "indie" insurances including altruistic, community, or other small time insurance provisions.
... except that he lied to you in his very first sentence. Inflation is NOT "a rise in the average price level." They tell this lie so that idiots will believe that inflation is caused by greedy evil capitalist businesses raising prices rather than the government printing more money. A rise in the average price level is a consequence of inflation, but NOT inflation. Inflation is one thing, and one thing only ---> an increase in the supply of money (a.k.a. printing more money.)
The prof is wrong about one thing. If an individual has the power to raise the cost of all energy by some factor, that will affect the price of everything because energy is a universal input. If the rise comes via a tax, then the tax offers some compensating balance. If the rise is due to regulation and the denial of permits to operate, then there will be a rise in all prices with no compensating balance. This activity will cause an increase in all goods and services regardless of an increase in the money supply. Eventually however, barring an increase in money supply, some goods and services will deflate as they are seen as expendable in order to fund the basic necessities of life. Stagflation and business closures follow.
Saving during deflationary periods has a positive effect just like in tamed inflationary periods. The saver likely will earn less interest, but also the dollar strengthens/purchasing power increases giving the saver a tax free increase in purchasing power. Businesses also get to borrow at a lower rate of interest and liquidity is not needed by the Federal Reserve. All input prices likely will be favorable than they otherwise would be.
For myth 10 , I have a question. Is inflation in part an acceleration of money? One of the issues I have is 0DTE options and vix1d. The thing is when I think about basil 3 and when 0DTE options started trading, it matches up perfectly with inflation. I'm using the vix1d as a proxy to the 0DTE options. If options are offering leverage = to 100 shares couldn't that accelerate money. Every day those options are moving large quantities of borrowed money. Couldn't those 0DTE options cause the acceleration of money?
Woah I never thought of myth 6. That's insane. This is even more reason to avoid the federal reserve centrally planning on fixing our economy because they could very well be doing more harm than good if it takes a long time to even "know" if there's inflation
CPI does NOT measure "inflation", it measures the EFFECT of inflation. But; it also measures the effect of actual shortages. Inflation occurs ONLY to currency. Inflation, is the devaluation of your currency by the GOVERNMENT. As Milton Friedman once presciently told us: "inflation is created in only one place--Washington DC". That even the esteemed Antony Davies does not understand inflation is bad.
Coming up, this will be my second bout with "double-digit" inflation. I don't think it will stop at 8.4%. It's not a tap or a light switch that can be turned off, in a snap. It takes time and the delays cause suffering. Previously we were told that governments were trying to avoid inflation but now they can blame it on a dis-ease? "The rich get rich(er) and the poor get poorer." (Ain't We Got Fun - a song of the 50's cartoon era, FYI. BTW, it's a cool song along similar lines to the anti-Great Depression Song -- "Putting on the Ritz" by Irving Berlin." Both songs are somewhat sarcastic and fit the upcoming Recession perfectly, IMO.
I have very much enjoyed Prof. Davies vids so far. Looking forward to more. Here's a suggestion. How about one to examine the craziness of Modern Monetary Theory?
Isn't inflation measured differently than it was in the 70"s? Wouldn't inflation be higher than what we are seeing if we measured it the same as the 70's?
Incomplete coverage of causes of inflation because Prof A. Davies ignored the contribution of banks to increase money supply of cheap money over the last ten years. Otherwise it is very good video. Written by Dr. Issam Ghannam of SIEA
Reality- artificially low interest % rates must rise to knock down inflation % ,we need to see a solid 7-9% interest rate for several years to make things right
The primary reason raising the minimum wage is not inflationary is that giving people living in poverty adequate income to afford the basic necessities and rudimentary comforts of life, which they previously weren't buying, adds to aggregate demand. So aggregate supply must increase to supply those goods and services, growing the economy. We need to lose the false construct that giving to one necessarily means taking from another. If we are doing everything right, the pie is continually growing.
Would like to see this. While Japan didn't employ MMT, they did QE quite a lot. And deflation was the result from all the "money printing." It's more complicated than money supply (libertarian) or corporate greed (progressives). To quote a certain person: "only sith deal in absolutes."
That's the new definition. As Friedman states, inflation is always and everywhere a monetary phenomenon. Inflation used to mean an INFLATION of the money supply. Somehow it got mixed up with a rise in prices. All things being equal, you can't have a rise in the average price of goods and services. The money being spent on the increase cost of some goods means there's less money to spend on the cost of goods elsewhere. This means that some goods will have to drop in price (or never be produced).
You forgot the rest of the quote from Friedman "It's always and everywhere, A RESULT OF TOO MUCH MONEY, of a more rapid increase in the quantity of money than an output. Moreover, in the modern era, the important next step is to recognize that today, governments control the quantity of money. So that as a result, INFLATION IN THE UNITED STATES IS MADE IN WASHINGTON AND NOWHERE ELSE."
The new definition has been around since circa 1950. There's no confusion here. When economists want to talk about growth in the money supply, we say, "growth in the money supply." When we want to talk about a rise in the average price level, we say "inflation."
at the 19-20 min mark you say the money was invested in the financial market. Who decided and why was that decided? I can only assume the safe answer was to keep the market from crashing, but where did those profits go when the market rose 20%? (Social Security?, Bonds? Politician's coffers?)
Would it be better to grow the money supply at the rate of gdp or at the productivity increase rate? Simply sending or outsourcing functions offshore does not increase productivity though it likely decreases company costs. How should that be handled in considering monetary policy?
How about air (specifically oxygen)? You need it to live, but how much are you willing to pay for it right now? It is so plentiful and available that you probably wouldn't pay anything. It's not about utility, it's about circumstantial need. You could rephrase his argument to be that there isn't any one thing where circumstances couldn't render it unsellable.
@@darthhodges I don't know that that rephrasing is what he is stating. Intrinsic value literally means that it is inherent value - it's monetary worth, which is in essence what you are arguing (unsellable) is not part of the equation. Intrinsic value is value regardless of what is is currently traded at... either now, in the future, or at some mythical point where something would render it unsellable. According to Investopedia: Intrinsic value is a measure of what an asset is worth. This measure is arrived at by means of an objective calculation or complex financial model, rather than using the currently trading market price of that asset. Water and oxygen, I maintain, has intrinsic value because you CAN use an objective calculation: the fact that you die without it.
The phrase, "we need water to live" indicates that water's value is subjective, not intrinsic. That is, water has value *to you.* It's your need that makes water valuable.
@@AntonyDavies this is slightly a disingenuous framing. Unless humanity becomes able to live without water, Water will forever have some level of high value to enough of the population that it can be functionally said to have intrinsic value. Some people will always value it more or less due to their specific situation, but all humans will value water at some relatively high level. And then further down the needs to wants pyramid, you’d see food, shelter, Female eggs, ect. Because of what humans are and the likelihood that what we are will not change any time soon, certain things that are valuable today will still be valuable thousands of years from now. So technically you are correct that value is inherently subjective, but because humans are so similar, our subjective value for things is generally bounded to a slice of reality that doesn’t functionally change for long periods of time.
Yeah it's also important because gold can be actually used for something useful and industry whereas Fiat currency I guess you could make wallpaper out of it that's something useful...
There is a fundamental flaw in the assumptions here about taxation and government spending. It's true that the government _can_ and often _does_ spend money on things that consumers don't want. But that's not a given. The government could, for example, provide affordable housing, which the industry refuses to produce due to low profit margins. Consumers want this, and the private sector is not providing it. The government spends a great deal of money subsidizing many things that consumers buy and use regularly, like food, fuel, transportation and green space, and we don't have too much of those things. There are many useful things that will simply never be provided if the government doesn't provide them, and not because they aren't wanted or needed.
I do have to disagree on one point. Saying that the cost of fuel is not inflation but a single good or service, while true in one aspect, is completely misleading. Literally every good and service is tied to fossil fuels is some aspect. Even if just passively. Having a policy that causes the rise in the price of fuel will cause inflation. I doubt you could name any other commodity that has this effect, so it's easy to claim otherwise.
"Gold doesn't have intrinsic value any more than paper dollars have intrinsic value" -Davies "Can you wear your paper dollars or craft your paper dollars into fine jewelry? Can you use your paper dollars inside electronics that are then used to send people to space? -Peter Schiff
Yes, I think Davies was wrong to say that gold has NO intrinsic value. OTOH, it is probably true that gold's intrinsic value is not equal to its market value.
Is inflation always more subdued under a coin based gold standard if the government is contained and limited (no crony capitalism)? What causes inflation on a gold standard? A few obvious reasons can be war, fads, unfavorable weather for crops, fear, excessive demand, and too many suppliers/saturation (forcing prices up for survival, in the short run and too few suppliers in the long run) as productivity and the purely competitive market system that lack monopolies and limited competition subdues and deflates prices. These same factors exist in our fiat system, so does the fiat system exacerbate inflation higher making boom and busts more extreme?
Can not printing money be less toxic if it is an investment with a return greater than the cost? After all, money has value simply because we trust it; it has no real value; we assign value to it. The problems are based on abstract conceptions of money. It seems also, the Fed is living in a fiction of thinking the answer is raising interest rates which impacts the lower classes in a disproportionate way and creates a greater gap between the wealthy and the poor. How do we tackle this issue without creating a larger class of poor people?
Just as the increase of the price of a single good (oil)is not inflation, the decrease of the price of a single good (electronics) is not deflation. Another problem is that GDP is not steady when you’re taking hits from hurricanes and wildfires. Not sure how cleaning out Armories and sending the stuff to Ukraine is accounted for, either. If Biden pledges a billion, is that for depreciated book values, or new list? Great content and wonderful delivery. Thanks.
