Well, let's say it with music
Singer was shot in the head last night, his condition is critical but he's still alive.
And yet, the government makes jokes and calls people complaining about insecurity deluded. f*ck them, for real.
What's the Libertarian solution? Yeah, he's a dictator who is ruining Venezuela in very definite ways. The classical liberal approach would be to invade and topple him if it affected our interests, but otherwise to trade with them until enough countries complained, and then embargo. Conservatives would say "why should we interfere in another country when we have enough trouble here"?
What's Libertarian foreign policy like in this situation?
I suspect the policy would be to do nothing, letting citizens engage or not, to trade or not, as they chose. If the situation developed into an active threat to the country, then there'd be a significant and strong response. But if citizens were meddling over there and got in trouble, they'd probably be mostly on their own.
I doubt there would ever be an embargo unless a threat developed, and I think a military response would be much more likely. I don't know how accurately I understand Libertarianism, but I suspect the overall policy is live and let live, but if you bite us, we will stomp you so hard you'll never be able to do it again.
Aetius would be much more credible on this subject than I am, however.
Hey look a thread about Venezuela.
And Bloomberg pitches in, too.
Pray tell what was the inflation rate in Sudan (right?) when things went to crap there? Weren't food prices doubling a day or something?
Anyway, not saying this is anywhere as bad (yet), but it reminded me of that.
It was Zimbabwe, and it was much worse. But same sort of idea, yeah.
Let's be clear about it, though. Hyperinflation is not caused by increasing the money supply via taxation or borrowing (ie, issuing bonds). It is the case that governments issue money (and pull it back) via various means during normal operations, and these activities increase in crises. But until the government resorts to flat-out issuing money unbacked by *something*, hyperinflation is simply not in the cards.
Let's be clear about it, though. Hyperinflation is not caused by increasing the money supply via taxation or borrowing (ie, issuing bonds).
Taxation just moves money around, neither creating nor destroying it. However, because governments are considered creditworthy, government borrowing does have a small, ongoing inflationary effect, because banks lend money to governments, and then use those bonds as assets to create more lending against. So there's a definite inflationary effect while the bonds are being issued, and then a deflationary one while they're being repaid. If there's a default, you can get powerful deflation, which is what they're trying to avoid in Europe.
This isn't hyperinflation, though; hyperinflation happens when the government starts printing money to pay the interest on money it's already borrowed. The best definition I've personally seen for hyperinflation is that it happens when people are building inflation into their prices; if they know that replacements will be more expensive, they will price their stock higher than they otherwise would. This can snowball very, very quickly, where everyone is raising prices in anticipation of other people raising prices. It's extraordinarily destructive to an economy.
But until the government resorts to flat-out issuing money unbacked by *something*, hyperinflation is simply not in the cards
Heh, well, none of the governments in the world today actually back their money with anything whatsoever. Full faith and credit doesn't mean anything if you're not making an explicit promise about what you'll pay back.
Making a full-faith-and-credit promise to repay nothing on demand is precisely identical to an unbacked promise to pay nothing on demand.
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Making a full-faith-and-credit promise to repay nothing on demand is precisely identical to an unbacked promise to pay nothing on demand.
Unsuspended?!
Hi, Malor!
Heh, well, none of the governments in the world today actually back their money with anything whatsoever. Full faith and credit doesn't mean anything if you're not making an explicit promise about what you'll pay back.Making a full-faith-and-credit promise to repay nothing on demand is precisely identical to an unbacked promise to pay nothing on demand.
Which explains why the US and the rest of the fiat world has suffered from hyperinflation over and over again in the last 80 years or so, I guess. Or, maybe, there's something wrong with your theory.
Heh, well, none of the governments in the world today actually back their money with anything whatsoever. Full faith and credit doesn't mean anything if you're not making an explicit promise about what you'll pay back.Making a full-faith-and-credit promise to repay nothing on demand is precisely identical to an unbacked promise to pay nothing on demand.
Which explains why the US and the rest of the fiat world has suffered from hyperinflation over and over again in the last 80 years or so, I guess. Or, maybe, there's something wrong with your theory.
Well it's only in the last 20 years or so that Western economies have started seriously taking the hatchet to their reserve ratio requirements so, yeah, hyperinflation isn't ruled out.
Or, possibly, you still, after all this time, don't really understand what I'm telling you. You never have.
That post is a great example, right there. It makes very little sense. I'm saying 'full faith and credit is meaningless', and you're saying "Oh yeah? Well we haven't hyperinflated yet, so you're wrong!"
In other words, I said the sky is blue, and you just insisted that I'm completely full of crap, because tree trunks have bark on them.
Ahhh Malor... It's like you never left!
Or, possibly, you still, after all this time, don't really understand what I'm telling you. You never have.
That post is a great example, right there. It makes very little sense. I'm saying 'full faith and credit is meaningless', and you're saying "Oh yeah? Well we haven't hyperinflated yet, so you're wrong!"
In other words, I said the sky is blue, and you just insisted that I'm completely full of crap, because tree trunks have bark on them.
You are saying it is meaningless... He is saying it is meaningful and shows that it has worked for 80 years to back up that claim. He understands, I understand. We just disagree.
80 years is not good enough for you but it is exactly one lifetime.
It is fragile without institutions. But we have institutions to make sure hyperinflation does not happen. Destroy those institutions, hyperinflation will happen.
Welcome back
Or, possibly, you still, after all this time, don't really understand what I'm telling you. You never have.
Trust me, I follow you - you've explained it in great and sneering detail, with insults and psychic commentary, many times. I just disagree, based on what I can see and understand of economics.
That post is a great example, right there. It makes very little sense. I'm saying 'full faith and credit is meaningless', and you're saying "Oh yeah? Well we haven't hyperinflated yet, so you're wrong!"
Yeah, actually. If fiat currency worked the way you think it does, it would have blown up in the US and in many countries many times over the last 80 years. Or, alternatively, the danger is there, but it's so rare that it only happens in more than 80 years. Either way, it puts paid to your claim. In fact, fiat currencies are stable enough that we only see hyperinflation as a result of bad policies put in place in extreme situations, not as a natural outcome of fiat currency.
And I still invite you to reconsider your theory, on the basis that it's contradicted by, you know, history.
In other words, I said the sky is blue, and you just insisted that I'm completely full of crap, because tree trunks have bark on them.
Ironically, as Goman noted politely, you're showing you don't understand my argument at all. Think it through. If fiat currency is that weak - promises unsupported by anything - how has it lasted us this long without blowing up into hyperinflation?
Venezuela does this to people
Edit: Polarization, I mean : /
If fiat currency is that weak - promises unsupported by anything - how has it lasted us this long without blowing up into hyperinflation?
Because they haven't printed enough of it yet. Once they get to the point of printing money to pay the interest on the unserviceable debt load we're carrying, hyperinflation is the only possible outcome. Well, unless they choose to default, in which case we'll have a deflationary crash.
It's not a matter of if, it's a matter of when. One thing or the other will happen. The single strongest law in economics: things that can't go on forever, don't.
But we didn't really go off the gold standard until 1973. Up to that point, full faith and credit meant something. We actually were promising to pay gold in exchange for dollars, but we only honored that promise to foreign governments, not citizens. We broke that promise in 1973, and it is at that point that full faith and credit lost meaning. A full faith and credit promise to pay nothing is worth precisely the same as a street urchin's promise to pay nothing.
The serious monetary abuse didn't start until Greenspan's tenure, sometime around 1992. We had eight years of huge boom from money delirium, a near-crash, another five or six years of housing delirium, another much more serious near-crash, and now we're in what I believe is the final bubble, that of government debt accumulation.
The world has gone pear-shaped since 1992. It just gets sicker with each passing year.
This is why.
Because they haven't printed enough of it yet. Once they get to the point of printing money to pay the interest on the unserviceable debt load we're carrying, hyperinflation is the only possible outcome. Well, unless they choose to default, in which case we'll have a deflationary crash.
So, this is what I and others, including Cato, are saying - hyperinflation doesn't happen without some serious trigger to induce the massive printing of money, intentionally without backing, in an attempt to deal with a crisis. It's not the result of ordinary operations.
But we didn't really go off the gold standard until 1973. Up to that point, full faith and credit meant something. We actually were promising to pay gold in exchange for dollars, but we only honored that promise to foreign governments, not citizens. We broke that promise in 1973, and it is at that point that full faith and credit lost meaning. A full faith and credit promise to pay nothing is worth precisely the same as a street urchin's promise to pay nothing.
As for 1973, remember, you've defined the end of the Gold Standard as 1913 and also in the 30's. We've had numerous knock-down drag-outs as to why the US has been a fiat economy since those dates. If you're pushing it to 1973, are you backing off those earlier assertions - that we need an *actual*, 19th century style gold standard to come back? Or are you finally okay with the fractional reserve system that held from 1944 (Bretton Woods) to 1973? In the past, you've been adamant that the only functional gold standard is one that allows *citizens* to hold gold; you weren't okay with that privilege being given to governments instead.
Either you've made a big change in your thinking (which is fine, welcome even), or you're re-scaling to fit the argument at hand. But anyway, if we can agree that a trigger is needed for hyperinflation, then the argument on this point goes away.
http://www.bbc.co.uk/news/world-lati...
My ill-fated country is on the brink of collapse, hopefully whatever lesson there was for us to learn out of these 14-years will be learned.
Edit: some pics
http://www.noticias24.com/fotos/noti...
Can't help but wonder if the US isn't sort of nudging Venezuela toward dissolution. If you wanted to really hurt Venezuela, blowing up that refinery is one of the most effective things you could do.
Or perhaps government corruption and mismangement led to equipment failure. Incompetence is more common than covert action.
Yeah, I don't really buy that. They've been running their refinery just fine for umpty-ump years, and it's one of the most important pieces of their economy. Accidents do happen, but given the US's history in the area, well, let's just say that this is pretty darn convenient.
Don't forget Stuxnet. That kind of code could easily be aimed at the refineries of countries on the US's sh*t list.
I think you give the Venezuelan government too much credit. But it's impossible for us to know either way.
I don't see the white house ordering any action that would risk increasing oil prices in the short term.
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