AnonyMint... wow you have written a lot and it is very clear that communicating the mechanics of this system is like trying to explain the mechanics and economics of Bitcoin 5 years ago.
I understood the Bitcoin white paper within an hour or so.
Please don't tell me that I can't read research papers.
Be very careful about what you assume...it is likely your explanations that are not well organized and presented. However, I will leave open the possibility that I am sufficiently ignorant of option trading to understand what might be obvious to others.
It is made all the more difficult due to wide spread economic ignorance which means even those most literate among us often have some of the subtitles of economics polluted by the economic propaganda and fallacies pushed upon us by government paid 'economists'.
I have learned very much from Martin Armstrong who was a
friend of Milton Friedman (and Margaret Thatcher), and Friedman admired his understanding of economics.
Saving isn't really a good thing in excess, as it is capital that is not applying any thinking, just sitting there dumb.
I am not calling you economically ignorant, only that there is a whiff of keyensian economics to your arguments and I have as strong detector for that.
First of all, probably you (and 99% of readers) don't even know
what Keynesian economics is-- it is not printing money. And even so,
I don't agree with Keynes's theory.
Rockwell
This smells bad. Lew believes in gold standard, along with Ron Paul and Gary North. They are clueless. I provided a post upthread with many links from Martin Armstrong, which puts to rest that nonsense. I also had a link upthread to my unarguable economic point with a math proof, which I assume you did not read.
First Principles:
1) There is no such thing as idle 'money' or 'unproductive money'. At all times money is always sitting in someone's account. It represents a future claim on resources, and abstaining from making a claim is better than trying and failing.
This is a clueless statement. Stop right there.
Go back upthread and read my links about inflation, debasement, and how an economy functions.
I am talking about who is rewarded return, based on what risk and knowledge they input.
There is a very clear math proof. Go find my link to it upthread. You are obviously moving too fast and not able to absorb all the details, because you are trying to program at the same time as do this.
Programming before having a clear consensus on design is not wise, unless you are sure you are omniscient.
2) At any point in time there is a fixed set of resources in the economy and they all belong to someone.
3) Two people swapping resources does not change the size of the pie or health of the economy from the perspective of anyone else simply because they swapped. Only those two individuals can perceive a gain from the trade as they each have something they value more than they had before. In other words, money is always held by hoarders and changing the current hoarder is neutral on its own.
No, no, no. Wrong, wrong, wrong. People are not same. What they do with capital is based on their unique knowledge and risk profile.
4) only action can create or destroy value in the economy as a whole.
Wrong! So very wrong.
Inaction destroys capital. Time-preference is fundamental, because the duration of human life is finite.
Your fundamentals are way off course.
5) Hoarding money is choosing not to consume resources.
It is more than that. It depends on how we dilute inaction with debasement. Go read my links upthread so you can learn.
It drives prices down (deflation) which encourages more 'hoarding of money' in a positive cycle that drives prices down until someone sees something they can trade their money for that will increase the value (production) or meet their pressing needs (consumption).
It is choice of where capital is directed that is more important than the choice of doing nothing. Because all capital (human lives) are in motion.
Savers shouldn't lose all their saved money overnight, but they certainly shouldn't be rewarded for doing nothing. They do add some knowledge by being selective, but this is more valuable when they are selective in a way that they are always deploying.
Either way, the hoarders of money benefit both the production of goods by freeing up real capital (not money) for productive purposes and consumption of others by reducing prices through reduced demand and increased production due to investment in capital such as factories.
Malthusian nonsense. More and more efficient production overturns scarcity. Reward goes to those who know how to deploy.
Contrast this against a debt induced demand, which is giving money ignorantly to everyone to spend ignorantly.
Whereas when you give return to those who proved efficient production increase, you concentrate capital to those who increase everything and away from dumb savers and debtors who add nothing.
A saver can only gain return by stealing from those who deploy increases in productivity.
Based upon these principles I reject any argument on its face that claims hoarding and saving is bad.
There needs to be some reserves because of the business cycle due to waves caused by inertia.
That is why we don't debase savers to 0 overnight.
Anyone who is willing to produce value today in exchange for money, and then not consume any resources for 10 years, is providing a huge loan to all of society and interest on that loan is paid via the resulting deflation.
The really easy 'proof' of the fallacy in your argument is to define 'excess savings' in a meaningful way. How can I tell that there are excess savings? If it exists, what free-market options are there to solve it? Ultimately the answer is always, "tax", "inflate", or "subsidize" and all of these are a violation of non-violent, decentralized principles.
Excess is stealing value from producers to give it to savers with a blanket dividend.
Dividends are a non-negotiable part of the system. We consider a desire to hoard our currency a huge success because it means we are creating a product people want to own. The market will then decide our fate.
Then you don't have my support.
I would rather compete against you.
So I will stop giving you design help.
Wow, AnonyMint... How did you succeed to gather all the wrong postulates of modern economics in such a small space? LOL...
Capital is nothing else than postponed consumption. Newly printed money is not capital. Actually, the most efficient way to destroy capital is to print more money thus decreasing the purchasing power of the existing capital. "Dumb" savers don't need your "reward" if there is no monetary inflation. They will gladly keep their savings even at 0%
there is no monetary inflation (money printing)! Inflation is just an additional tax imposed on our society masked behind smoke and mirrors as a production and consumption incentive in the pseudo scientific economic theories...
If you encourage consumers and punish savers you actually punish the most efficient members of our society, those that produce more with less resources. In the same time you subsidize consumers, those that produce less with more resources. We all know what will happen with a system that is using more material than it creates! It is happening right in front of our eyes. Ever increasing number of people that can't physically exist without loans. This is why payday loan services are flourishing in recent years.
