Let me give u an example:- 1 There is a free market. 2 Business is at boom. 3 Interest rates increases. 4 Demand for money increases. 5 More money is printed. 6 Quantity of money increases. 7 Purchasing power of money decreases. 8 Than some thing happens(SHAET HAPPENS!) 9 People start to hesitate in investments. 10 Interest rates decline. 11 People start to lose jabs. 12 As purchasing power of money had declined(ref#7) prices will go up. TADA here is your hyperinflation
the only reason why government print extra money is 1. because there is need for more money because people have more on their bank accaunts. or 2. because they want to keep the value of their money low. so that other governments keep buying from them.
and increasing intrest rates does not mean that the demand for money increases.
IMO capitalism started off great, however, I don't think anyone was foreseeing the future in enough detail to know what it was going to become. IMO capitalism is a fixed game now. Kind of off topic, Madoff said the two most important things he learned in trading was: 1. The market is fixed for people to win and lose. 2. The whole thing is a ponzi scheme.
Kind of off topic, Madoff said the two most important things he learned in trading was: 1. The market is fixed for people to win and lose. 2. The whole thing is a ponzi scheme.
I don't see how trading, in general, is like a ponzi scheme. I mean, Madoff was involved with ponzi schemes so... in that case, yeah, trading for him was a ponzi scheme.
Ponzi schemes are bad. People should be informed at how dangerous ponzi schemes are. It's kind of hard to teach people how dangerous ponzi schemes are when everyone is so used to paying into social security. Then again, at least other ponzi schemes are voluntary, optional, and therefore avoidable.
the only reason why government print extra money is 1. because there is need for more money because people have more on their bank accaunts. or 2. because they want to keep the value of their money low. so that other governments keep buying from them.
and increasing intrest rates does not mean that the demand for money increases.
Actually it does, and forms a cornerstone of a government's economic policies. Ever heard of monetary policies? Yeah.
Sorry, but hyper inflation is not caused by the free market.
It can be caused partially by a free market BUT it doesn't mean a free market will necessarily lead to hyperinflation.
9 People start to hesitate in investments. 10 Interest rates decline. 11 People start to lose jabs.
Which is why economists like Keynes supported the use of government policies to rectify the market by fiscal, monetary, forex policies.
I don't see how trading, in general, is like a ponzi scheme.
Honestly I don't think communism works in a free market. I was merely saying that people would be free to share a business in a truly free market if they wanted to. This is why I support a free market, because you aren't forced to run a business in a particular way.
Yep yep, but it's still incompatible with the free market, unless everyone is deciding the prices, because the term ''free'' implies that business owners can set their own prices for example.
The purest form free market is practically non existent . Interest rates and demand of money are co related.
A pure form of free market is not possible because of human nature; the government needs to step in the solve any problems about the market, that is to say, market failure.
Examples of market failure:
1) Providing Public Goods: Public goods are things such as lamposts, they are non-excludable and non rivalrous. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good. The private sector won't produce such goods, hence the government does so.
2) Negative Externalities: That is, goods that cause harm to third parties, such as smoking.
Capitalism might have its flaws, but they can be remedied. Just because the purest form of something doesn't exist doesn't mean it isn't a good solution.
1) Providing Public Goods: Public goods are things such as lamposts, they are non-excludable and non rivalrous. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good. The private sector won't produce such goods, hence the government does so.
I've actually never heard of non-exludable and non-rivalrous goods before. However, I believe that anything that is needed would be provided by the private sector.
I've actually never heard of non-exludable and non-rivalrous goods before. However, I believe that anything that is needed would be provided by the private sector.
Defense for example? The private sector won't provide it.
Public goods! It's an essential part of Market Failure.
Defense for example? The private sector won't provide it.
I can understand why people would prefer it if the government provided national defense, courts, and a few other "defense/justice" services. I believe these could be provided by the private sector, but the private sector isn't allowed (and probably for a good reason).
However, I believe other goods and services will always be provided as long as their is a demand for said good or service. Earlier you gave us an example, such as lamp posts. The only reason the private sector would be hesitant to provide lamp posts is because the government is in charge of building roads. If roads were privately owned, I'm absolutely positive lamp posts would be provided without need of government intervention.
