pmaitra
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How is that statement countering post #77? You clearly do not have an answer. Please answer post #77, will you?Dude, you are blinded by the entire current system and it has clouded your arguments.
What is nominal? Anything that you express in units of currency. So, no matter what the nominal value is, the real value remains the same.I cannot give you a better example for first point. My grandfather could buy 1 kg wheat with 1paisa. Today it costs say 10Rs. The value of 1paisa has gone to zero today in real terms. But I can still afford 1 kg of wheat because my nominal wages have increased more than inflation. (Nominal means level of measurement. For eg 1m and 100cm are equal. Just quoting the length as 100cm does not make it longer.) So everyone cares about real wages and it has risen even though my grandfathers 1 paisa almost means nothing in today's world and fit your graph very well. Tomorrow I can just recall old notes and make 1000Rs in the old system=1Rs in the new system. France did it with Francs sometime back.
But yes, you are suggesting a solution here. Thank you. At least, something useful is coming out of this discussion.
Yes, I agree with what you are saying, but you are not coming clear on post #77 and that graph I posted. Either agree, or disagree.I told you not to mix hyper-inflation with the argument. If you have read my previous posts on other thread I mentioned creating money out of thin air goes to inflation and I even posted a pdf about it. The point I made above is:
That last sentences was, well, just too much. Scientifically determine? You're kidding me right? This entire system is unscientific. It is like an equation that we cannot balance. Like an irrational number or a power series, which we do not know how to control.Suppose you are an entrepreneur and you design XYZ flying suits.
No one flies using XYZ suits today. But you create it and now it is available in the market and it has some demand, but it would not get reflected on the inflation indices atleast for another 10 years. But this is increased productivity and people can use it with all the things they were using before. So, if you do not increase money what will it do?? Either XYZ suit will not see light of the day or some other product would die or nothing would die but consumption of all previous goods together would decline to make XYZ suit successful. Now if you use gold dig in a year to add to the money supply, it would probably avoid the above situations. But using a fiat currency and scientifically determining how much money to print depending on productivity increase looks more appealing to me.
Ok, can you please answer post #77?