The USA is not going to be so lucky as to get a lost decade like Japan.

Japan had exports, high rate of savings and a world economy that was not in recession. All those factors produced a carry trade that helped Japan money printing to not make prices rise (removing trade barriers with China and allowing cheap products into the country also helped).

The USA does not have any of those and its going to suffer an inflationary crisis, stagflation. People is going to look at the Japan lost decade with envy.

Some at the Mises Institute are too atached to gold, but there are a lot of misesians in the bitcoin community.

What the fuck is a public good? I never got the concept.

Its either a private good or a government good. I guess you could make something you own public if you signed a contract allowing anyone to use it, but I wonder how that would work.

Housing for example. There is too much capital created for housing during the previous years. All that capital could have been used to created capital that created production more according to consumer needs.

There is no excess production capacity, just production of the wrong type for the present demand.

Slack capacity is an aggregate and thus is quite useless to understand what is going in the economy. Why does it matter if there is a lot of construction machinery stopped if there is not enough demand for houses anymore. Does stopped construction machinery means anything if there is a growing demand for computer chips? or if price of food is going up? All this construction machinery is slack or malinvestments?

We could try to worship a golden caw so the prophet comes down from mount Sinaí... or something like that.

Another evidence on how money arises naturally in the market, this time a very curious one.

This is an explanation on why the game developers decided to change the game monetary system and the restults they got.

Previously the game imposed a unique currency that they called "gold". But dont get fooled by the name. This "gold" currency was fiat. You would get "gold" for killing monsters and other tasks and the game could create as much as it needed. To avoid inflating too much they had some artificial "gold" sinks where you had to perform certain tasks regularly that would consume "gold". It was a imposed and centrally managed currency.

But this system promoted a bunch of unwanted behaviours (just like in the present system, who would have guessed right?  ) and they observerd other RPG games to see how they dealt with the monetary issue. They liked how the monetary system behaved in some games, and discovered those games had no centrally planned and mandated currency system, and that competing currencies had arrised naturally, using scarce items in the game.

They are implementing a competing currency system now and they are very happy with the preliminary results. Who would have guessed

The whole thing is an interesting read and put a smile in my face to see the ingenuity of this people and how they found out in practice that voluntary exchange is always the best solution: http://pathofexile.com/news/2011-02-08/dev-diary-currency

Government printing money.

The government does not directly decide to print money, but when the central bank monetizes government debt its equivalent to government printing money.[1] So basically the amount of money increases definitevely due to government spending through monetized debt.

Btw you dont need an increasing money supply to pay interests (it just makes it more easy to repay but its not necessary).


[1] Monetizing government debt is equivalent to government printing money: The central banks always keep renewing the government debt and buying more, they always increase the amount of government debt they hold in the medium and long term (you can easily check this). Therefore the principal never gets payed back because its always renewed. What about the interests? The interests the government pay on the debt is central bank benefit. The benefit of the central bank goes back to the government (in the case of the fed weekly). Therefore the government get the interests back. Its like if it never payed them.

If the principal will never be repayed and the interests are not payed either... its not debt. In reality its just an accounting trick. The central banks use the government debt to inflate. When the government spends through monetized debt, its spending printed money (not debt).

The thing is that a lot of crisis (not all though) are usually related to problems and disruptions in the money market, therefore having a local currency does help weather the crisis. Even when the crisis is not directly related to monetary issues having a local currency can also help by making local intereactions easier.

+1

Also, conspiracies dont have to produce the expected effects. I am sure there are a lot of unintended consequences. Central planning does not work and it applies also to conspiracies.

There is nothing wrong with this. I have always though and history also indicates the same that having local currency complementing a more global currency is positive because it helps isolate your local economy from economic problems in other place. For example, the north of Brasil has a local currency and they have weather this crisis very well. Switzerland has a long tradition of private currencies and have achieve better prosperity (not the only reason obviously). Nowadays swiss companies have a private currency system that they use to lend and borrow between associates of the system, and all the industries acknowledge that it has been a key factor to mantain economic stability.

Having a local currency is very positive. It helps you isolate you from external shocks.

Kiba already explained perfectly why its not true that the factory owner sets wages. If it were true most employeers in the USA would pay only minimum wage. The reality is that only 4% pay minimum wage.

Now, it is true that government regulations hurt the workers position when negotiating a wage and allows the factory owner to pay less for labor. But this is not a problem of the free market, its a problem of state capitalism or corporate socialism (Ill let you choose the label).

Again, I would like to know why you think its wrong. I agree in a lot of things with socialists, specially mutualists, but I really dont get this obsession with demonizing wages.


The anarcho-communist communities did not live enough to see what would have happened. How do you interpret that they not were able to organize and defend themselves? Also its important to notice that some of this communities became extremely morally repressive even banning alcohol. In some few cases they even became murderers.

Also, all societies that are capable of lasting die from within. Its human nature. People get used to the institutions that gave them prosperity and take them from granted. Then they start neglecting this institutions assuming the prosperity will last. Its nothing extrange, it happens to all systems because its human nature.

Btw, I dont think the American West as a whole is an example of anarchy. Some regions and some zones in particular were, but not all, although there is no doubt there were freer than today.

Ah, the irony.

I am still researching the security part myself. I discovered libertarianism 4 years ago and it has been quite a intellectual travel, since I was a socialdemocrat, raised by socialdemocrat parents. What catched my eye was economics and I have focus in that part (and I have ended up writtign weekly in a national media of my country which I never expected to) but I am not so knowledgeable in other areas.

But for example, I have read about a nordic society in the middle ages that was basically voluntarely. It worked as a sort of "clans" but not clans as we understand them now. They were voluntary clans, where you could join and leave them freely. It was obviously a problem to not be in one of this organization since you had no protection or legal system, but competition worked. The society lasted 200-300 years. As an example, while in mainland Europe the literature heroes were all warriors, in this area the literature heroes were lawyers... Tell me which one do you think was a most violent and underdeveloped society.

Why do you keep bringing the present corporate system like if it is something we defend or support? In  general libertarians oppose the present system as interventionist and government ruled, included the corporate world. For starters, a corporation is a entity that receives government privileges (it changes from country to country, but it usually involves things like limited liability) and libertarians are opposed to those. Corporations as we know them today are only possible because of government intervention. So please, I know there is a lot of bullshit around the internet with libertarians supporting corporations and stuff, but dont fall for it. Libertarians are not pro-business, libertarians are pro-free market.

And answering your concern, its because they would have no other option. Look all the example of unregulated markets (and I mean real unregulated markets, not hyper-regulated markets that are called deregulated for political propaganda). What do corporations do when business goes done? They lower the price, offer a better product or close. Its not that they have many more options. What else can they do if they can not lobby for government violence?

The telecomunications sector was usually an example of a sector that the market could not handle because of high natural barriers of entrace (expensive infrastructure). A lot of "economists" (for lack of a better word to describe them) said that only government could provide telecomunications efficently and respecting the poor (the poor is the preferred excuse of statists, like if they really care). Well, Somalia since it became anarchic developed a telecomunications industry that offers the cheapests rates in all Africa... And we are talking about an industry that supposedly the market could not handle. I bring this example, because it shows your misconceptions on how the market dynamics work. Without a government "to protect" the somalies from the private telecomunications companies, why are they getting the cheapest rates? Have the company owners suddenly become good people? Doubtful. Its just that they have no other option than to lower prices to not be eaten by the competition. If you had a government "to protect you", they would have used it to protect the already stablished companies from the competition and keep prices high, with some good sounding and caring excuse. But that wasnt an option, so they lowered prices. This is how things work in real live, not the wacko theories about government protecting people.

Again, its not that some person is going to be good or bad because of a different system. Its that the incentives and possibilities are different.


Austrian theory does not really talk about debt fuelled bubbles, it talks about inflation fuelled bubbles. It just happens that in the present system the way to inflate is mainly (but not only) through debt, so some people focus on the debt. But there could be other ways. The problem its inflation distorting the natural interest rates.

Also, the Fed can say what they want. The Fed also says its there to take care of the value of the dollar. The Fed is not independent. The board of governors is a federal government agency and its members are selected by the president and ratified by congress. You can check the Nixon Tapes to see how a president influences the Fed actions. But even if it was independent, whats your point? That it benefits private companies? Obviously, its a government intervention in the market. We have been telling you that government intervines in the market to benefit a few big companies and this is one of the best examples. Again, libertarians are not pro-business, libertarians are pro-free market. The fact that something is private does not make it libertarian. It has to be free of government intervention.

Btw, if people that supposedly cares about the environment started using their money to buy property with natural places they like to conserve, instead of using it for propaganda and government lobbying it would be much more efficiently use for the cause. The problem is that a lot of people that supposedly care about the environment in reality only care about politics.

I dont understand why you started discussing about monetary deflation when nobody supports a system based on monetary deflation. But hey, at least we agree. Btw, the fact that people dont buy what they dont need is a good thing.


No. Really no. The internet does not transmit all the information a voice conversation does, and I have heard heavy facists stuff coming from interventionist, so I am not surprised anymore. Im glad you were joking though.


Yep, all true. Still dodging the question. The collectivist system, the government, is violating individual rights (the property of the natives) to destroy the amazon. Collectivism always promises the moon and delivers destruction and poverty.

So many misconceptions in this (and I couldnt but to smile while reading because I use to belive most of it):


Its not that a person in charge of a company cares more for you. The same person can be in government and in a private company during his/her live, and he cares for you the same. Its not that the people in government care more or the people in the private companies care more. Its stupid to believe any of those. That is not the point. The important point is that the private sector is designed to focus the incentives towards pleasing the consumer because it can not use violence, it has to get the agreement of the buyer, while the government is a monopoly that uses force to acomplish its goals. Even if a good person gets to be dictator it would probably fuck up big time because there is no way anyone can know the necessities and desires of so many people. This is why voluntary exchange works and violence does not.


"Old times were always better"... There is a psycological study somewhere proving that the mind tends to focus on the good memories and tries to forget the bad ones, which is why people tend to think that the past is always better.

In the past people died everyday, there was rampant malnutrition, slavery, rape, etc... and the leaders did not give a fuck. This idea that old times were better is just fictional. I am glad I dont live in the past seriously, specially because the lower classes had it really tough compared to this days.


"If you all dont obey ME there will be caos"... Mubarak just used that line in Egypt. When it has been proven again and again that self-organization and spontaneous order always beats central planing, people still believe in the old idea. You know, Im fine with it as long as I get to be in power. Leaders will always attribute themselves the achievements of a society (and blame the faults on others), when in reality is the people working and cooperating that makes anything possible.

Anarchy is order, government is chaos. If it was possible for the government to take control of every aspect there would be caos. Absolute caos and discordination. People would starve. This society only works because there are still some sort of self-organization and spontaneous order in the middle of all the government meddling.


Anarchy is not lawless. In fact, laws are respected more in an anarchic system than when there is a centralized system. Everything you said is possible under a non-government system.


Yes, definitevely government spending will create a statistical boom. Its just that it wont be a real recovery because the capital created wont be the addecuate to satisfiy the consumer needs and will collapse again.


Im not a capitalist, at least not in the popular sense. Im a market anarchists and I share some ideas with some self-proclaimed socialists and some other with some self-proclaimed capitalists. I really think the distinction is bullshit.

You seem to imply again that without the government there would be destruction or caos, and therefore anyone that wants to get rid of government is short sighed and crazy. What if what it is short sighted and crazy is believing that without government there would be destruction and caos?. You know, its funny because you see governments helping and enabling the destruction of nature, yet you keep hoping government will do something to stop it. Tell me this: if the majority of the people really wanted to destroy the Amazon to create agricultural land, how is a democratic government going to do anything else than destroying the Amazon?

Lets accept your defintions of capitalism and socialism. Why is any of those arrangements bad? (I am guessing you think one of those two arrangements is bad)


This is not true. There are examples in history. You can argue its good or bad, but you can not say its impossible.

Also, you can not say they did not lasted. Every human society changes for worse and for better. The fact of the matter is that it is possible. And you can not say the prove is that they did not lasted specially when you propose a system that has never existed.

So please, explain to me what is wrong with any of those arrangements.

But its different with voluntary currencies. If some people abandon bitcoin to start using googlecoin the price of bitcoin will probably go down because there will be less demand for them. If googlecoin creates a new market with different people and does not take users from bitcoin then bitcoin price wont be affected (maybe only the future potential of growth).

I still think its silly to trust a corporation money and the people that do will rightly get what they deserve. Hopefully they will learn something.

You said people dont buy stuff when prices go down. I said they do. Now you say that you buy stuff you need even when prices go down. You are disagreeing with yourself. This is getting a bit ridiculous. Either people buy stuff (for whatever reasons) when prices go down or they dont.


We have been talking of prices going down all the time. If you realize I have been trying to avoid the word "deflation" and always used the expression "prices going down" to avoid confusion. Again you are agreeing with me, people buy stuff when prices go down.

Nobody here is advocating persistent monetary deflation as monetary system (at least not me). Anyways, I am glad we came to an agreement.


Expreading democracy around the world... Is there anyone that stills believes this bullshit? Havent we seen enough damage and deads in the name of expreading democracy? In case you are interested the expression was coined by the early progressive movement that was a creation of big companies, specially the Rockefeller and the Morgans to create a moral justification to regulate the market and gain competitive advantage through political means. This has been extremely well documented. In fact, the first meeting towards creating the progressive party was full of Rockefeller and Morgan men.

There is a saying, that I never remember who said it, but its brilliant and it goes something like this: The more beautiful and utopic the promises from a politician are, the more darker his intentions. This really describes well the idea of "Expreading democracy around the world" that is nothing more than USA imperialism. In fact, its funny because the early progressive economists justified invading other countries by saying that business in the USA was too developed (late XIX century) and the USA government needed to invade other countries to guarantee new markets for the USA industries.

About the question, no, I would not justify invading a foreign country to impose any system. We should have learnt by now that the reasons for war are never charitable. The charitable part are just excuses for the mases.

Btw, I understand if you dont take my word for all this historic points I made and you can ask for references if you are interested in knowing the origins of the USA progressive movement.


The fact that the Amazon was there and its owners did not cut it down should tell you something about it. It took an organized government to do it.

I understand you have been educated to believe government cares for you and the environment. I was educated the same way (socialdemocrat parents and socialdemocrat myself until I was 27). Its not that way. Men get together and organize a monopolistic entity only to have control and profit violating other peoples rights.


Ok. I understand what you say. Let me make some points.

1. Money as debt is not the best source of economic theory. They explain very well how the fractional system works under a central bank, but they never mention the incentives the central bank creates to provoque that behaviour in banks, and they dont explain that without a central bank fractional reserve is very different.

2. Now to the point. Government spending can keep the GDP numbers going up. That does not mean economic growth. If you go on debt and start paying people to dig a whole and then cover it back the GDP will go up, but you have not improved the economic situation, in fact you are worse, because you have the same goods (filling and covering wholes produced nothing) and you have more debt.

So yes, government spending can create a statistic boom in the economic indicators, but, as I explained before, the government does not know how to satisfy the people, mainly because it does not operate under the price mechanism, so the government spending its just mainly waste (and you can litterally check that with the Obama stimulus and how it was used). It does not lead to recovery. Just for the record, right now its not the time to reduce basic welfare spending like food stamps and stuff like that. The poor people has been hit enough by government regulations, and there is no need to make them pay. There are a lot of places to reduce first. But as government are always an agent for the big interests the reductions are always towards the people.

As an example, you have the crisis at the beginning of the 1920's, caused when the bubble created by the Fed to pay for IWW went bust. The president then reduced taxes, reduced spending and the Fed did not had power to inflate until 1922 (it got special powers during the war that were removed when it ended). The crisis started worst than the Great Depression, but it was over in year and a half. Why? Because government reducing taxes and spending allowed room for the market to coordinate itself again. Entrepeneurs created the industries that produced what people wanted (not just government silly spending) and real wealth appeared.

The macroeconomic mentallity that any spending is good is totally wrong. You can not pretend that just spending in anything is going to produce real wealth. If you spend in useless stuff in fact you are squandering wealth, and becoming poorer. Yes, spending a lot boosts economic indicators but its not a real recovery, its not sustainable. It will prolong the depression. Yes, reducing government spending will make the economic indicators go down a lot more, but it will lead to a quick recovery.

You are not answering to my questions,


That is exactly my point and proves what you said before wrong. When prices go down people keep buying.


Again, you deflect the issue. Brazil is a clear example of the violation of individual rights (in this case mainly property of the natives) by a collective organization (the brazillian governement). If individualism* was respected in Brazil the Amazon would be a lot better.

*Individualism in politics mean respecting individual rights, NOT going along in live. Individualism is a set of rules for cooperation between people.


This is totally false. It seems to me you think gov spending comes from nowhere like magic, and also that gov spending is as efficient and looks towards people needs as the private sector.