Thank you.

I could not have wanted a better demonstration that the arguments for governmental regulation of the money supply rest on nothing but evasions, fallacies and slogans.

When you tire of such intellectual fairy floss, Ron Paul gives a clear explanation of the privatizing of profits and socializing of losses that you all seem intent on defending:
http://mises.org/story/3687

So Ron Paul's dissembling is your idea of clarity, Peter Hume. That explains a lot.

>>Ron Paul gives a clear explanation of the privatizing of profits and socializing of losses<<

Let's take a quick peek at his arguments.

>>But how much do we really know about what goes on inside the Fed?... From its founding in 1913, secrecy and inside deals have been part of the way the Fed works.<<

Hmmm. Looks like we're already into daggett/Arjay territory here. Nothing like a bit of ignorance to get the conspiracy juices a-flowin'.

What's their crime, again?

>>But under the old definition of inflation — an artificial increase in the supply of money and credit — the entire reason for Fed's existence is to generate more, not less of it.<<

Typical of the Austrian School. The reason that it is an "old definition", Peter, is that it is out of date. No longer relevant. Not informative.

Unless, of course, you believe as the Austrian School does, that any form of economic growth stimulus is automatically bad.

There is no doubt that if the precepts of this fringe group of ultra-conservatives (small-c) had been maintained, there would be no possibility of a boom-bust cycle. Unfortunately, economic growth would also have stagnated to the point where we quite probably wouldn't have invented the television yet, let alone the computer.

Yes, there is a price to pay for the ability to print money. However, it is a price that is determined by the market, once the credit has been created.

Applying Austrian School/Mises Institute values to our present situation is akin to those that the US applied to Prohibition. Alcohol is bad, therefore it must be banned. When the only real cure is to un-invent alcohol.

Un-inventing money is not a realistic option in 2009.

Pericles’ post explicitly shows the unshakeable but false belief of the inflationists that we can create real net wealth by stamping pieces of paper.

The predictable gross economic and social chaos that is unleashed by this self-evidently absurd piece of voodoo is then blamed on the ‘free market’.

Once again I can half agree with you, Peter Ah Hume.
We have just witnessed not the crime of the century, but the crime of the millenium; perhaps the greatest single crime in all history.
Millions left homeless. Millions unemployed. Super funds slashed. Billions of tax payer dollars shunted into recapitalising banks, sent almost bankrupt by their own greedy lending practices.
And who went to jail for these massive crimes?
I know who didn't go to jail; the same ones the Misians would have us liberate from the cruel shackles of legality.
These are the people the Austrian school would have us believe, will be turned into innocent choir boys, by the simple mechanism of the free, unshackled marketplace.
You know what 'the marketplace' is going to do now, Peter Ah Hume. They've just been shown an absolutely guaranteed way of turning big bucks. If you're too big to fail, you don't need to be responsible. You don't need to be clever. You don't even need to do it right.
You can actually make more money by screwing up.
Quick guys, let's merge! Let's amalgamate! Let's get so goddam big, the tax dollars will come directly to us, and we can do without governments altogether!
Then we can do away with this one person one vote crap. It will be one share one vote; and for all intents and purposes, all the important shareholders will be able to sit at one table.
This isn't conspiracy theory. This is the inevitable result of laissez faire economics.

Grim

If the state steps in to stop failing businesses from going broke, by taking money from everyone else in the population and socialising the losses, that's not "the marketplace" or "laissez faire economics" you fool. It's the state!

Grim's post shows the invincible ignorance of the statists. They would rather see what they hate most in full swing - crony capitalism, privatised profits and socialised losses - than abolish the arm of the state that is creating those privileges! You would cut off your nose to spite your face.

This is the level of the debate. You point out the obvious - you can't really create real net wealth by stamping pieces of paper, and government doesn't really have a cornucopia with which it can abolish economic scarcity through the printing press. It is only forced redistributions, that is all.

And what are you met with? A howling chorus of disapproval from those experts on running a capitalist economy - the socialists. We are all so indebted to them for their wonderful demonstration of what paradise on earth could really be like - North Korea, Mao's China, Stalin's Russia, Castro's Cuba, Mengistu's Ethiopia, Burma, Saddam's Iraq (Arab Ba'ath Socialist Party), Hitler's wonderful National Socialists. Oh I forgot, that's not 'true' socialism. We have to keep trying the same thing - arbitrary political control of production - and insist it eventually must work.

Wake up people! It doesn't work! It doesn't matter how much you want to believe it!

Notice by the way, in all the twisted logic, Grim still won't actually venture to defend the basal propositions he relies on.

At least when the superstitious primitives did rain dances to make crops grow, they weren't choosing a means that actively worsened the end they were trying to achieve.

But those defending governmental regulation of the money supply are actively causing the worst problems they are trying to solve with their intervention. Theirs is a superstition even more ignorant and deluded than that of the rain-dancers

peter ah hume, once again half right.
The RESPONSE to the GFC was 'statist'. The CAUSE of the GFC was a bunch of ratbags manipulating a financial system in the absence of Law.
What bothers me is that no one seems to be asking whether or not this was premeditated. Did the ratbags perpetrate this crime, knowing full well they would be bailed out? Or are they still being paid millions for simply being incompetent? As Malcolm Turnbull has recently pointed out, the survivors have come out of all this very well indeed.
Once again, they're richer, and we're all poorer.
I'm not sure which answer bothers me most.