Peter, repeating your own straw man arguments over and over again,
is not going to win you any arguments, I am afraid.

http://en.wikipedia.org/wiki/Straw_man

Qanda, the problem is not capitalism, but human nature itself.

We seem to have a financial crisis, every 20 years or so. Then
along comes a generation of new kids, it seems they need pain to
learn the realities of life.

It seems that people need to learn the same things, over and over
again. Australia was lucky in a way. The HIH debacle was a great
lesson for us, so Costello clamped down on financial regulation
and installed some tough regulators, which kept the industry on
its toes.

Not so in America, where George and Dick did not believe in regulators,
so they became toothless tigers. Many FBI staff who
previously had policed corporate fraud, were given new tasks of
hunting for bin Laden and co. Even when it was pointed out to the
SEC, that Maddock was a fraud, 5 times in fact, they still took
no action.

Ultimately Americans can only blame themselves, for voting for
such dummies not once, but twice. But human nature being what it
is, people will ignore all that, rationalise it all away and
find somebody else to blame, rather then themselves.

In Greece they are doing the same right now. The Greek Govt cooked
the books for years. But now its not their fault, but those
seemingly evil speculators! Ha

Qanda
Wouldn’t it be great if it was just a matter of opinion whether we could make something out of nothing.? Unfortunately it’s not.

At least Yabby is openly embracing a fallacy. Thus he shows that he genuinely can’t understand the economics of banking, and is honestly participating in the debate. He thinks banking is that people write mysterious squiggles on paper, and then issues forth “money”, and this is the source of all wealth. That’s as far as his understanding penetrates.

Then you explain it to him, and he *still* doesn’t understand it.

Pericles is in an even worse intellectual position. He deliberately evades embracing a fallacy on which his argument must necessarily depend. For if he answers the question he is evading, either he admits that we can’t make something out of nothing and therefore that the inflationists’ claims are false; or affirms that we can’t make something out of nothing and therefore the inflationists’ claims are irrational.

Either way he gets blown out of the water, but that’s not because it’s a “trick question”; it’s because the question correctly pins the point at which his argument is false, and the reason he isn’t answering it, is because he knows it will prove so.

What an intellectually honest person does in this circumstance is admit that he’s wrong and re-think his views. Does Pericles do that? No.

Does he communicate that he’s not going to answer it, and give reasons why? No.

The difference between his not answering my questions, and my not answering his, is this. My question goes to the issue on which the entire discussion turns. For if inflating the currency does not confer a net benefit, then a) inflation as a policy is not justified, contrary to Pericles claim, and b) any considerations against the gold standard are irrelevant, and therefore so are Pericles questions.

So what we are witnessing from Pericles is both invincible ignorance *and* deliberate dishonesty.

If you are persuaded by that, I think you have credited him more for bad faith, than you have debited me for bad temper.

Peter, you continue with your straw man tactics, so I will make it
even simpler for you to understand.

Pericles is quite correct in his understang, your question is the
problem.

So my question is this: If I give you a shovel, will that mean
that holes will be dug? Clearly that depends on how and if you
intend to use it. Owning a shovel, does not create holes in your
garden, using it does.

Its the same with credit. Printing banknotes does not create
wealth. Providing credit, which can be used to increase economic
activity, certainly can be used to create wealth, which would not
exist without it.

So to keep it simple for you, unless you use your shovel to dig holes,
it won't do it for you. Is that simple enough now?

Sorry that should be:
"...or affirms that we *can* make something out of nothing and therefore the inflationists’ claims are irrational."

Thanks for the measured observations qanda.

>>repeating things that got us into trouble in the 1st place is just plain silly. It probably has something to do with a fundamental flaw in capitalism. It would require a paradigm shift to overcome and given human nature, it ain't goin to happen<<

A paradigm shift would be a neat way out, of course. But you're right, it won't happen.

Fortunately, the systems that we have, flawed and creaking though they may be, have the capacity to evolve.

The key variable that searchers for the Platonic ideal in finance keep missing, is the massive complexity of the interlocking global finance world.

But because of that interlock, it has self-adjusting mechanisms all over the place.

So for example, while China holds massive amounts of $US debt, they are hardly likely to encourage or precipitate a significant devaluation of the dollar. Especially as it would also mean that their exports would start to be priced out of their overseas markets.

That doesn't mean that over time, the exchange rate will not tip in the direction of China. It will. Nor does it mean that China will not gradually sell down the portion of their debt denominated in $US. It will.

But changing the system itself?

A pipedream, only.

As for you, Peter Hume, it is quite clear that you have totally disengaged from any attempts to support your position. You remind me of the guy I meet this morning, pushing an empty shopping trolley through the CBD, swearing at passers-by.

Noisy, but unintelligible.

Someone should take you aside and explain, that you don't win an argument just by claiming that you're clever, and other people are not. You actually have to step up to the plate, and justify your position.

Saying "but you're too stupid to understand" isn't a particularly convincing position, I'm afraid.

I notice you've gone dead quiet on gold.

Was it something I said?

Unless you can show how stamping paper creates real wealth, then you *are* too stupid to understand, and there's no point my wasting time explaining anything more. But no doubt some more of your favourite dishonest evasions and circular arguments will satisfy you.