the huge Problem that most people doesn't really understand

[kireinaha]

Yes, according to your sources in the Huffington Post. Thanks for sharing.

You gonna explain why I'm wrong or are you gonna let your fallacy spaghetti?

Since you're not going to present any sources, I'll take the first step. Here's one from CNN that shows the purchasing power of the minimum wage since 1938 to present.

http://economy.money.cnn.com/2013/02/14/minimum-wage-history/

This is CNN, a left wing source, mind you. It shows that purchasing power peaked at approximately $10 in the 1960s, but today it is still higher than in the '80s or '90s, in spite of all the sob stories from liberals. If even CNN admits this much, then it's case closed, I'm afraid.

[1715548672]

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[kireinaha]

You know, I thought bitcoin was championed by libertarians, but now that I've discovered bitcointalk, I've found that it's actually liberals who want to believe that they're libertarians for some reason.

[solex]

You're going to have to elaborate on why inflation is so evil, more than just calling it "horse shit" and telling me to think about it.

Inflation is evil because it takes purchasing power away from currency holders (and, in general, the poorer you are, the higher the percentage of your savings is based on currency), and gives it to the firsts to receive the newly printed money, namely governments, banks and those well connected to them. But even worse than that, inflation is evil because it creates capital destructive business cycles. All this crisis the world is living now would not have happened if central banks did not have the power to inflate their currencies in order to manipulate interest rates.

Oh, and BTW, the 2% rate you talk about, it's the official estimation on price inflation. The actual monetary inflation is much higher. What means that, if money supply was stable, average prices would decrease. It's not just 2% of purchasing power you lose per year, it's much more, since you'd have to consider how lower would prices be if there was no inflation.

Excellent post.
Another way to think of inflation is a stealth tax on savers, earners and spenders. Even if you never file a tax return you are still paying tax on every form of currency that you have in your possession (except gold and b_____n).

[BitcoinAshley]

As long as you're working or earning money in some form, your salary should adjust for inflation so an annual rate of inflation of 3% or whatnot shouldn't be a problem. Of course, you also don't want to hold all your money in a savings account or your checking account, that's why it's a good idea to invest in a portfolio of stocks and bonds. Historical returns of these assets have outpaced inflation considerably, even if it misses the mark on the occasional year or two. If people are unable to save any money throughout a lifetime of working, then I'm sorry, but it's not the fault of inflation. It's a matter of personal saving.

You're a little off the mark there, buddy. Yearly inflation in the USA would be 8-10% per year if it were calculated in the same way that it was when Carter was president. The ShadowStats guy has done a lot of work in that area. There are a lot fewer stocks and bonds* that will outpace inflation when you consider that not only is the figure itself jerry-rigged, but it affects different income levels in vastly different ways, which I shall explain:

Food and gas prices might be 50% of op's dad's income, but it might be 5% of Mitt Romney's income. So to say " 'inflation' is '3%' " means one thing to Mitt Romney and another thing to op's dad, whose purchasing power has declined a lot more than Mitt Romney's has - solely becuase more of his purchases are the things that aren't included in inflation calculations because they're "too volatile" (read between the lines there). One function of an official price inflation figure is to determine how the average consumer's purchasing power is affected, and in that regards, it absolutely fails. Real inflation in Venezuela earlier this year was estimated to be up to 35% YoY, but the government still *insisted* it was 10%. In the USSA, the government may insist that inflation is <2%, but the purchasing power of your average family is going down by a lot more than 1-2% every year, so we've already lost one of the most important functions of such a metric. Now it's just another excuse to say "Everything's OK, you get your 3% raise each year so stop whining about price increases."

Someone who's making $500,000 per year won't be affected so much by a tripling of food and energy prices over a long (or short) period. They might notice, and they might get mildly annoyed. But they aren't going to notice as much as the family that lives on $50,000/year or less. They might get a 3% raise each year too but it's not going to do diddley-squat if the things they spend 20, 30, 40% of their income on (higher % the lower the income is) are increasing by 25%, 50%, 100% or more over the space of a single decade.

Your response sounds like economic academia, i.e. "everything works the way it should be, don't worry, "inflation" is only <2%, so a 3% yearly raise should cover it, and if you can't save money there's something wrong with you, not the economy." 

*And finally, for lower income brackets, getting into traditional investing markets is sometimes not a financially viable option. The small amount that they'd be able to invest would hardly be worth the broker fees, the hassle, etc. Even platforms designed to lower the barrier of entry (e-trade, etc) still have a tiny barrier of entry, and the most impoverished families (the number of which are growing) can barely put food on the table, let along scrape off enough worth investing in a traditional market. Trying to buy one $13 stock each week, but there's a $4 fee for each trade? Not gonna help. This is another reason why Bitcoin is great. I started off dutifully investing $20 a week or so which was all I could afford at the time. Now I have lots, and lots, and lots, and lots, and lots, of money. Not that it will work this way for everyone, but at least I was able to put it somewhere where not only did it offset the <2% 'official inflation figure' (that doesn't apply to me since my purchases are heavily weighted towards food and gas,) but it offset the food and gas inflation, and quite a bit more. Even if it were only able to offset food and gas inflation in addition to the bullshit figures released by the likes of Bernanke, it would help a lot more people than traditional currencies and markets.
P.S. the dow jones hasn't hit an [INFLATION ADJUSTED] ATH, at least not last I checked. A lot of people forget this. And that's with official inflation figures. Considering real inflation, the markets are even more miserable.

[kireinaha]

I don't understand what you all propose for these problems? Yes, energy prices are rising, but that's not due to monetary policies so much as it is global demand and increases in federal and state taxation. You think a lot of families can't get into investing because they barely have enough money to make ends meet as it is, but what would happen if we switched to a 100% bitcoin economy? We'd have deflation, and nobody would want to spend any money aside from what they absolutely needed to survive. Companies would stop hiring workers and people would lose their jobs.

[MoonShadow]

I don't understand what you all propose for these problems? Yes, energy prices are rising, but that's not due to monetary policies so much as it is global demand and increases in federal and state taxation. You think a lot of families can't get into investing because they barely have enough money to make ends meet as it is, but what would happen if we switched to a 100% bitcoin economy? We'd have deflation, and nobody would want to spend any money aside from what they absolutely needed to survive. Companies would stop hiring workers and people would lose their jobs.

There's a whole lot of wrong with this post.  Please spend some time learning about economics and come back. 

[kireinaha]

I don't understand what you all propose for these problems? Yes, energy prices are rising, but that's not due to monetary policies so much as it is global demand and increases in federal and state taxation. You think a lot of families can't get into investing because they barely have enough money to make ends meet as it is, but what would happen if we switched to a 100% bitcoin economy? We'd have deflation, and nobody would want to spend any money aside from what they absolutely needed to survive. Companies would stop hiring workers and people would lose their jobs.

There's a whole lot of wrong with this post.  Please spend some time learning about economics and come back. 

You're actually proposing that a deflationary economy... would create jobs?  OK, I've had my daily dose of comedy for the day. Thanks, guys.

[MoonShadow]

I don't understand what you all propose for these problems? Yes, energy prices are rising, but that's not due to monetary policies so much as it is global demand and increases in federal and state taxation. You think a lot of families can't get into investing because they barely have enough money to make ends meet as it is, but what would happen if we switched to a 100% bitcoin economy? We'd have deflation, and nobody would want to spend any money aside from what they absolutely needed to survive. Companies would stop hiring workers and people would lose their jobs.

There's a whole lot of wrong with this post.  Please spend some time learning about economics and come back. 

You're actually proposing that a deflationary economy... would create jobs?  OK, I've had my daily dose of comedy for the day. Thanks, guys.

I'm not proposing any such thing.  History is funny that way.

The 6000 years of a "gold standard" is funny history.  Gold is a deflationary currency unit; as it's availability during any given age is limited to that which has been mined out of the ground, but by comparison to population growth across recorded human history, gold is an increasingly scarce commodity.  At some point in human history, we moved from zero jobs to non-zero jobs.  Since this occured well before the rise of inflationary fiat currencies, then the obvious answer must be that the deflationary nature of currencies, at a minimum, does not prevent jobs from being created.  The realtively short history of infaltionary currencies asl tells us that the infaltionary nature of said currencies, at a minimum, doesn't prevent existing jobs from destruction either.

Perhaps, then, the evidence suggesting a relationship between the inflationary/deflationary nature of the common currency and that of the net creation/destruction of jobs is weak.

[mmitech]

I don't understand what you all propose for these problems? Yes, energy prices are rising, but that's not due to monetary policies so much as it is global demand and increases in federal and state taxation. You think a lot of families can't get into investing because they barely have enough money to make ends meet as it is, but what would happen if we switched to a 100% bitcoin economy? We'd have deflation, and nobody would want to spend any money aside from what they absolutely needed to survive. Companies would stop hiring workers and people would lose their jobs.

There's a whole lot of wrong with this post.  Please spend some time learning about economics and come back. 

You're actually proposing that a deflationary economy... would create jobs?  OK, I've had my daily dose of comedy for the day. Thanks, guys.

here you go http://rt.com/usa/fast-food-protest-usa-802/    everything is cool in USA.

[DoomDumas]

IMO, this is just the begining, real inflation is to come.. The whole fiat system fail as been prevented for now 5 year, by big bluff printing tons of fiat around the world.. Prepare for the real problem to became reality, it's a matter of a few years.. I dont wish it, but imo, it's inevitable, and it will cause a lot of suffering.  Hope we'll be able to provide for our children, the generation to come is the one that will have to recover from the big historic worldwide monetary crash.

[johnyj]

The real problem is, with a inflative monetary policy, people lose the possibility to save, they have to take risk and invest and join complex investment games until they lose most of their investment money in a financial bubble

[AnonyMint]

As long as you're working or earning money in some form, your salary should adjust for inflation so an annual rate of inflation of 3% or whatnot shouldn't be a problem. Of course, you also don't want to hold all your money in a savings account or your checking account, that's why it's a good idea to invest in a portfolio of stocks and bonds. Historical returns of these assets have outpaced inflation considerably, even if it misses the mark on the occasional year or two. If people are unable to save any money throughout a lifetime of working, then I'm sorry, but it's not the fault of inflation. It's a matter of personal saving.

that is the exact horse shit I am talking about, take time and think about it, they keep doing the same shit over and over and all over again, prices goes up 10% and they raise the minimum wage 3% to give you the illusion that they are fixing problems....

Minimum wage is part of the problem.

Fixing the fast-food strike

Monetary debasement is both necessary and good.

You are clueless and I am not going to explain it.

[Cyberdyne]

my father has been working all his life and could not save anything

I just want to focus and comment on this part specifically, because it instantly reminds me of the book "Richest Man in Babylon" and specifically, the part about investing 10% of all you earn.

I personally believe pretty much anyone on the planet can invest a tiny % of their income, even if it's not 10%.

Even the poor Indian child who earns $2 per day sewing clothes... if she can survive on $2 a day, she can survive on $1.98 a day, and invest 1% of her income. That % put away builds exponentially, and always ends up significant if you only have the discipline to stick to the plan.

Bottom line, I believe anyone on any income can save if they choose to.

[MoonShadow]

As long as you're working or earning money in some form, your salary should adjust for inflation so an annual rate of inflation of 3% or whatnot shouldn't be a problem. Of course, you also don't want to hold all your money in a savings account or your checking account, that's why it's a good idea to invest in a portfolio of stocks and bonds. Historical returns of these assets have outpaced inflation considerably, even if it misses the mark on the occasional year or two. If people are unable to save any money throughout a lifetime of working, then I'm sorry, but it's not the fault of inflation. It's a matter of personal saving.

that is the exact horse shit I am talking about, take time and think about it, they keep doing the same shit over and over and all over again, prices goes up 10% and they raise the minimum wage 3% to give you the illusion that they are fixing problems....

Minimum wage is part of the problem.

Fixing the fast-food strike

Monetary debasement is both necessary and good.

You are clueless and I am not going to explain it.

AnonyMint, you are a strange jumble of correct and false.  I wonder how both Austrian and Keynesian economic theories can co-exist in your head without your head exploding from the cognative dissonance.

[niothor]

As long as you're working or earning money in some form, your salary should adjust for inflation so an annual rate of inflation of 3% or whatnot shouldn't be a problem. Of course, you also don't want to hold all your money in a savings account or your checking account, that's why it's a good idea to invest in a portfolio of stocks and bonds. Historical returns of these assets have outpaced inflation considerably, even if it misses the mark on the occasional year or two. If people are unable to save any money throughout a lifetime of working, then I'm sorry, but it's not the fault of inflation. It's a matter of personal saving.

that is the exact horse shit I am talking about, take time and think about it, they keep doing the same shit over and over and all over again, prices goes up 10% and they raise the minimum wage 3% to give you the illusion that they are fixing problems....

Minimum wage is part of the problem.

Fixing the fast-food strike

Monetary debasement is both necessary and good.

You are clueless and I am not going to explain it.

AnonyMint, you are a strange jumble of correct and false.  I wonder how both Austrian and Keynesian economic theories can co-exist in your head without your head exploding from the cognative dissonance.

When you start wondering about what AnonyMint really thinks , you're on the path to madness

[MoonShadow]

When you start wondering about what AnonyMint really thinks , you're on the path to madness

The truth here scares me.

[mmitech]

my father has been working all his life and could not save anything

I just want to focus and comment on this part specifically, because it instantly reminds me of the book "Richest Man in Babylon" and specifically, the part about investing 10% of all you earn.

I personally believe pretty much anyone on the planet can invest a tiny % of their income, even if it's not 10%.

Even the poor Indian child who earns $2 per day sewing clothes... if she can survive on $2 a day, she can survive on $1.98 a day, and invest 1% of her income. That % put away builds exponentially, and always ends up significant if you only have the discipline to stick to the plan.

Bottom line, I believe anyone on any income can save if they choose to.

true, only if that girl had access to invest her $0.02, I am sure most of you guys who leave such comments had a good life where you didn't worry about allot of things, I am thankful that my father has worked that hard to raise us and put us on the right way so today we can be proud of what we became, and he wasn't able to save at the time but he at least he made sure that we will be able to.

you know I wont really forget when once I asked him about the opportunities he missed, and what could he do and whatnot, his answer was: I gived you something more valuable than money, I worked all my life so you can have the proper education, money is an asset that you can lose and knowledge is something that lives with you.






 

[DustyRah]

This is how the Fed works. They print 10 bucks and LOAN it out to the other banks. Now the other banks owe the Fed 10.5 bucks in all because of interest.

WHERE IS THE 0.5 bucks going to come from? There is no extra 0.5 in the economy at all. And the interest keeps ticking and ticking and ticking....

Bitcoin gives a finger to financial institutions as well as governments which are influenced by the rich anyway. Its a huge finger at that too! 

[phr0stbyt3]

As long as you're working or earning money in some form, your salary should adjust for inflation so an annual rate of inflation of 3% or whatnot shouldn't be a problem. Of course, you also don't want to hold all your money in a savings account or your checking account, that's why it's a good idea to invest in a portfolio of stocks and bonds. Historical returns of these assets have outpaced inflation considerably, even if it misses the mark on the occasional year or two. If people are unable to save any money throughout a lifetime of working, then I'm sorry, but it's not the fault of inflation. It's a matter of personal saving.

that is the exact horse shit I am talking about, take time and think about it, they keep doing the same shit over and over and all over again, prices goes up 10% and they raise the minimum wage 3% to give you the illusion that they are fixing problems....

You're just making an emotional argument. I'm not sure where you live, but most developed nations strive to keep the rate of inflation at an annual rate of 2 or 3% year over year, and that's generally how it goes. It doesn't go up 10% in one year, unless you live in Zimbabwe, in which case I apologize.

The purchasing power of minimum wage does fluctuate up and down a bit year over year, but that's just because it isn't changed on any regular interval. The current purchasing power of $7.25 is approximately the same or perhaps even higher than it was 50 years ago. But nobody has ever been expected to live independently or raise a family on minimum wage in the first place, it's a worker's responsibility to develop their skills and the rest will follow. If you're 30 and still making minimum wage, something has gone wrong.

You're going to have to elaborate on why inflation is so evil, more than just calling it "horse shit" and telling me to think about it. Maybe you're the one who needs to think a little harder.

Did I miss something here? A quick google of "purchasing power over time" will bring up a nifty calculator that I use often. In 1964 $7.25 was the equivalent to roughly $54 today (2012 is close enough).
http://www.measuringworth.com/uscompare/result.php?year_source=1964&amount=7.25&year_result=2012

[deisik]

to be honest after watching the poverty in Europe report, I feel more comfortable holding some bitcoins than having fiat, each time the price crash/correct than bounce back it makes me more confident about the whole concept of Bitcoin.

I think you can't even picture it to yourself what real poverty looks like...