Re: Storing cash?

On Feb 12, 4:29 pm, EskWI...@xxxxxxxxxxxxxxxxxxx wrote:
In misc.survivalism, CanopyCo <Junk74...@xxxxxxx> wrote:

Inflation in itself has always been confusing to me.
It appears to me to be simply a matter of all businesses wanting to
make to much profit from each enterprise.

That is why it is confusing to you.

Inflation is caused by too may dollars chasing too few goods and services..
When the money supply expands too quickly, sellers have the opportunity to
increase prices without losing too much business, resulting in greater
total profits.

Conversely, when unsold inventories exist, but there is too little money
in the system, prices are cut in an attempt to maintian the highest total
profits, via increased sales. This is what we are seeing currently.


Not always.
With the gas company that killed us, they up the price until so high
that they don’t need to sell but one gallon out of the five gallons
they used to need to sell just to stay at the same profit margin or
better.
In other words, they once sold gas at $1 per gallon and sold 10
gallons per X.
Then they upped the price to $10 per gallon so that they didn’t have
to sell but 1 gallon per X and just didn’t sell or even make the other
9 gallons.
After all, there was not but X amount of dollars out of any budget
that can be used for gas, so once they got all that money there was
nothing left to buy more gas with, so why make it.
Notice that there were no gas stations that sold out or could not get
gas, but the price still went up until it looked like they may be
forced to lower it.
The lower the price when they are threatened with being forced to
lower it.
After all, if they are forced to lower it, then they may be forced to
lower it to a point lower then what they can get away with if they do
it voluntarily.

It is as simple as supply and demand.

The Fed controls the money supply, and attempts to maintain stable prices
(which is the same as saying a stable currency value) by keeping the money
supply just equal to the amount of stuff that can be bought with it.

Businesses will always raise prices if it will increase their total
profits, and will always lower prices if it will increase their total
profits.


And that is what brought us to our knees from the gas companies.
We need to get a handle on that or they will put us all out of
business because of there short sighted decisions.
Just controlling one end of the equation did nothing because the other
side just keeps one doing what forced the government to print more
money in the first place.

The feds get it balanced, and the companies say “I don’t want it
balanced. I want to be rich.” And then bump up there price, thus
canceling out the feds balancing efforts.

To do this, they mark up the selling price of the item and / or cut
wages..
Then the people actually earning the businesses living can not buy the
items, so they push for a wage rise so that they can live on the
wages.
So the business owners rise the prices again so that they can still
get there over pay.
On it goes, until someone stops it.

The way to stop it is to decrease the growth of the money supply. The
traditional way to do it is to raise interest rates (among other
techniques). This results in fewer loans, and less new money is created.


That is only half of the equation.
That will do nothing about the gas companies (and others) from upping
there price as high as they can while lowering wages as low as they
can.
Thus changing what the money buys.
If you don’t control both ends of the deal, you control nothing.
You just keep changing your end, and they keep changing there end
until one end or the other takes over.

Conversely, in situations like we have now, interest rates are lowered,
encouaging marginaly profitable businesses to expand. This demand for
money increases the money supply, alowing those workers to keep employed
and keep producing new value.


So, we have to borrow money to buy the gas in order to keep in
business.
That did not help.
That is why they went under.
Because the income was to low to support the increased cost that the
gas companies forced on us.
Thus they went under, because they were not able to sell what they
made because the gas company took up every available extra penny.
Thus they had nothing to buy anything with, other then gas.

same way I have always said was needed.
Do not allow the business to charge what ever they want, because they
are determining the price regardless of how it effects the entire
nation and not based on actual cost to produce.

This often results in shortages. If a business cannot make a profit that
they are comfortable with, they stop producing or selling that good or
service, regardless of demand.


And someone less greedy starts doing it and we still get the product
but without the inflation.

It’s how it used to work, back when businesses were all small.
If the local freight hauler or local store got to greedy they just got
one of the locals to hook up his wagon and haul there freight at a
reasonable price then opened there own store and sold it at a
reasonable price.

Now days, opening a business is not so easy, and competing with a big
business is even more unlikely.

After all, that is basically how money works.
$1 is worth x amount of gold, x amount of noodles, x amount of gas, x
amount of housing, ect.
It is what the money is based on, not just gold or silver, but
everything.
Keep it the same, and the money stays worth something.

But that "everything" keeps changing in quantity (usually up), the
population keeps changing, and the relative amounts of gold, silver,
noodles, gas and housing keep changing.

And that in a way is a legitimate reason to change the price, so that
you can invest it into more noodle makers so that you can once again
supply the demand.
Once the new noodle maker is paid for, then there is no longer a
reason to maintain that price, other then greed.
Not to mention the fact that this is not what happened with the gas
companies.

It would be better to make the business use its profits from the
previous years to enlarge there business.
After all, that is how they bought the first noodle maker in the first
place.
Therefore they can also buy the next one the same way.

That way, the price stayed stable, and so did our economy.

Each business strives to maximize
total profits. In a capitalist system, we see this as a good thing, under
the theory that the maximum amount of goods are going to the folks who
value them most.


No, the goods go to the rich that can afford them while the people
that actually make the goods get nothing.

How much a person values something in no way puts money in his pocket
to buy the item with.

Not to mention that it is cheaper to make less items.
Thus even higher profits if you price a item so high that only the
rich can buy it, and at a price equal or higher then what you would
make by selling more of them cheaper.

The capitalist system is based on greed, and greed is not a good
thing.

Keep changing what the money will buy and it becomes worthless.

Sometimes, like now, money becomes more valuable. Look at oil prices.


Actually, it still is not more valuable then it was before the gas
companies killed us.
Back then gas was $1 a gallon tax included.
Now it is $2 a gallon, but the trick is that it was $4 a gallon before
it was $2 a gallon.
Money will not be more valuable until gas gets lower then $1 a gallon
and the rest of the items sold return to there original price.
Otherwise it is just less lower then it was but is still not even
equal to its original value.

Part of the gas companies trick.
Raise the price radically, then lower it a little to make people think
that they are now getting a deal.
Like running a sale where you mark up a item $2 then lower the item $1
during the sale, making it look like they lowered the price when it
actually went up $1.

Fortunately the present government is trying to do something like that
for us.
He is trying to limit how much a company can pay the top guy if they
get a bail out.

The reason for that is not to fight inflation. If you took all those
bailedout executives and added them all up, it wouldn't make even a
rounding error to the economy as a whole.


Limiting how much the top dog gets will help the economy because it
will force the money to be used in more economy boosting ways.


The reason that is being done is aesthetic: It looks bad. They are
beggers, hat in hand, asking for Billions, while at the same time living
in luxury. Obama inteded that if they want to receive welfare, then they
would have to do everything they can to first help themselves.

So, you are saying that limiting how they used the money hurt the
economy?
It was either only aesthetic, then it had no value, thus the opposite
would have value other then aesthetic.

Not to mention that if they had not wasted there money in the first
place, they would have had enough profit to maintain.
Thus cutting the top wages would improve the profit margin of the
company.

You see, the game is to get a company, run it into the ground by not
maintaining it while draining as much profit from it as you can, then
let if fall and go get another one to do the same thing again.

I doubt
that the total amout involved is significant. I also wonder how these
bailed out banks will be able to get the best and the brightest people,
when they are forced to pay a fraction of wat the bank across the street
is paying.


Best and brightest people?
Isn’t that what got them into this mess in the first place?
Playing games instead of just doing business as usual.

For a bank, open the bank, take in deposits, lone out a portion of the
deposits to those borrowing to make money, take in fees to make money.

The only need for brightest is to make sure you don’t lone more then
the borrower can pay back.

All the scams and games was what got them into a mess in the first
place.
If they had just stayed with the original format they would not have
got rich but would have stayed in business and still made a profit.

That way they will not just keep on over paying the top dog and not
paying the help enough to do any good.

The disparity between the rich and the poor has often caused bloody social
revolutions. We used to have a vibrant middle class, which was one of
America's greatest strengths. Nowadays, the rich get richer and the poor
get poorer, and the middle class is squeezed. For a decade or so, we have
given disprportionate tax breaks to the wealthy, and the middle class
drank the kook-aid and agreed with the rich that doing so was a good
thing. The folly of such policies has become increasingly apparent.


Exactly why we need to change things instead of doing the same thing
as we did to get into this mess.
Control how much of the profit the workers and employers get.
Because letting them control it just gets it all in there pocket and
as little as possible in the pocket of the guy that actually did the
work.

After all, if the top dog did not get it, then it will either be
reinvested in another business,

Only if it is profitable to do so.


Ok, you can’t keep it, so what you going to do with it?
And profitable is keeping it, thus the definition of profit.
Thus it is not profitable to do what you are allowed to do.
So you going to just burn it up, since you are not allowed to keep it?
Or are you going to just do the right thing and keep what profit you
are allowed to keep?

better pay for the rest of the crew,

Oly if they are unable to buy adequete labor at existing prices.


Can’t keep the money, so you have to spend it on someone other then
yourself because spending it on yourself is keeping it.

or lower the price of the item being sold in the first place.

Only if it will increase total profits.


Can’t keep the money, so you have to spend it on someone other then
yourself because spending it on yourself is keeping it.

There are a zillion other things that can be done with that money. One
poular thing to do is to pay it to stockholders as dividends. That causes
the owners to become happy with current management, and to give them a
bonus.


Depending on how the company is set up, that is still keeping it and
is not allowed in my plan.
The owner can not keep it for himself, no matter how he launders it.

--
The whole problem with the world is that fools and fanatics are always so
certain of themselves, but wiser people so full of doubts.
-- Bertrand Russell

True.
Fanatics are going to be the death of us all.
Fools without fanaticism don’t have the will or ability to change
much.
Even a fool will not loose everything and devote there entire lives to
one goal.
It takes a fanatic to do that.
.

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