The real reason why the rich get richer and the poor get poorer, finally explained, because I'm such a nice guy.

If the percentages of ownership on capital remains the same, but inflation continues to double the money supply, what happens?

Let's use the cliché that the 10% have 90% of the wealth.

Starting with a cool million...

The 90% have ~100,000$

While the 10% have ~900,000$

Inflation eventually doubles the money supply...

Now the 90% have 200,000$

While the 10% have 1,800,000$

Keep inflating the money supply:

90% = 400,000$

10% = 3,600,000$

90% = 800,000$

10% = 7,200,000$

90% = 1,600,000$

10% = 14,400,000$

90% = 3,200,000$

10% = 28,800,000$

90% = 6,400,000$

10% = 57,600,000$

You may have noticed that the gap keeps getting larger. In this example, it is due to inflation alone. You don't even have to wait for the population to grow. Inflation is enough to keep driving a wedge between 'poor' and 'rich' all by itself.

The one commodity in question that keeps up with the pace of inflation, is land.

If you continue this example until you reach today's "money", you will have ~:

90% = 419,430,400,000$ (419 Billion)

10% = 3,774,873,600,000$ (3 Trillion or 3,774 Billion)

Now you might understand why the Gold Standard had to be abandoned.

So where does inflation come from? Where is all this new money coming from?

Every time you are approved for a home loan the bank "gives" you new (never before existed until now) money. I don't even like to dignify its name, because in reality, it's basically identical to the practice of counterfeiting.

"But it's legal!" is the excuse I keep hearing. Well, if you want to get technical it's a legal-loophole.

- - -

There are other factors that contribute to the divide, or that drives the wedge between rich and poor, but monetary-inflation is the primary cause.

So first, I don't know enough about the Gold Standard to understand why it had to be abandoned. But I did hear a rumor that the African Union was looking to adopt a Gold Standard of their own. The rumor also said that if they did then that would have sent the market-based economy that everyone else was using into a tailspin.

So is the solution to the wealth gap is to do away with loans (including things like credit cards) and work toward deflation? How much inflation can there be for it to be considered "good"?

Relevant reads :

http://qz.com/772173/the-only-startup-founders-who-can-embrace-failure-are-the-ones-privileged-enough-to-survive-it/

http://qz.com/455109/entrepreneurs-dont-have-a-special-gene-for-risk-they-come-from-families-with-money/

(Again : We know there are people that "started from nothing" and became rich - we are studying what is the general trend, not the outliers which always exist).

inheritance is evil

I don't see how working off your ass and giving what you legitimately earned to your children is bad. The will to "make it better" for your children is probably as old as humankind itself. What is wrong about taking over your parents' possessions once they are no longer, which is what they wanted, too?

On the other hand, we're talking about people who, knowing that they will get ill one day and knowing that they will be old one day, do not make provisions (this is exactly what the Matthew 26 quote says) and still expect to somehow get through it and save their bacon because some fool will pay for them. And meanwhile they expect you to pay for them as well, because work sucks. Labor is exploitation, fuck the system. Except it's the system that feeds them.

This is one reason why retirement pay for most honest, working people is so lousy.

I am very lucky to be a member of a "free profession" (although "lucky" is a bad wording... you will probably consider this "stinky" again, but this didn't just fall from the sky -- I had to work very hard for years, take immense responsibilities, and deliver an intellectual performance that 90-95% of the population is simply unable to deliver, and I had to deliver consistently, and in the middle of the night -- the privilegues that I have now are not undeserved, they didn't grow on a tree).

This ("free profession") means that my retirement pay is managed by a mutual indemnity owned by the association of professionals. After one year of work, my pension claim was already higher than my mother's who paid into the social pension fund for over 40 years. Think about it, how can this be? Well, it's simply because my mother's payments feed thousands (uh... millions?) of slackers who never paid into the system whereas my money goes into a fund from which only people who paid in previously are being fed.

Now, before you accuse me of being "contra anything social", let's get this right. I'm perfectly OK with helping someone who is, without being responsible for it, poor, needy, in trouble. No question about that. You lose an arm and a leg and cannot work? I'll be happy to pay for your life (while being happy that I still have both arms and legs). You need to go to hospital because [some undeserved illness that I wouldn't want to have]? Same thing. I'm happy to pay.

But if you are in trouble solely because you didn't care to work (save, prevent, provide...), then well... go die, sucker. You deserve what you get.

I'm not the first to come up with this reasoning. Aesop (a slave without any material possessions, by the way!) had that same reasoning 1800 years ago already: https://en.wikipedia.org/wiki/The_Ant_and_the_Grasshopper

I also wonder why you choose to not get mad about, say, Foxconn(and Apple, and those are just examples)

Who says that I am not? I didn't mention them, that's right. But there is not enough server capacity to host a post containing everything that I'm upset with.

Now, since you named them: Foxconn. Indeed I really don't have much negative to say. They're big, and they make big money. Work conditions aren't so terribly great, but where in China/Taiwan do you find an employer with good work conditions. Thus... yeah, whatever. They sure could be nicer to their employees, but other than that, they make very real products which are useful and needed everywhere, and they make money from that. Not much wrong.

Oh right, there's those famous suicide cases. This is one of these typical socialist "evil, bad capitalists" lies where they only tell half of the truth and twist it around until it is completely untrue. Foxconn has 1.3 million employees, and 13 committed suicide within one year. That is a 1/100'000 rate.

If you care to look at suicide statistics for China, you find that the average is 13/100'000. Which means no more and no less than work conditions at Foxconn must be exceedingly good (in comparison to elsewhere in China), because suicide rate is 13 times lower than average. Or worded differently, working at Foxconn makes survival 92% more likely.

Apple, on the other hand, makes big money from products that nobody really needs, and tricks customers into spending money and more money and even more money, locking them into a useless virtual store, and brainwashes customers to even stand in line for two days before the release of the next shit that they don't need, blah blah blah...

So you could say they're exploiting the fact that people are just stupid. Is this ethical? Probably not. Is it really bad? Maybe. They're not doing anything that many others (including e.g. every existing religion) aren't doing anyway. But people are kinda guilty, too. I mean, it still takes two. Someone willing to exploit the fool, and... the fool.

(Incidentially, I own an iPhone too, but I didn't pay for it (I would never!). Wifey, who is in management at Big Evil Corporation gets a corporate phone, which always has to be the newest model for a reason that neither she nor I can understand. Either way, it means she regularly gets the newest iPhone a week or so after it comes out, and since no one entitled to get a corporate phone would use the last-but-one most recent model, they're not withdrawing the old one, but telling her "keep it for backup, just in case". Which means I always have the almost-newest iPhone, too. Yup, it does phone calls just as good as my 10-year old Nokia).

But what's more important, Apple is deceptive on tax. I don't have the exact number in memory now, but I think it was something like 5€ tax paid per million euros revenue in the European market. Something like that. Which they got by bribing some officials and making a shady deal with Irish government, rerouting sales from other countries there via some Hollywood bookkeeping tricks, and whatnot. Thus... being totally "legal" from some point of view (although the Court of Audit disagreed on that!), but still definitively immoral in every respect.

I agree that if you make a two-digit-billion revenue, paying a couple of hundred bucks of tax is not OK. And sure, if you do that and feel "right" about it, then something is definitively wrong with you.

But that doesn't mean that making revenues stinks. Nor does owning, or owning more than you stink. What stinks is being deliberately fraudulent.

inheritance is evil

Just pointing out that, due to inheritance, the "equal opportunities" thing is just bollocks. All kids are born the same, but some will enjoy privileges and opportunities that others don't have, without doing anything to earn it. Can we at least agree on that? *Some* of the underprivileged children will "make it" up the ladder, sure. Doesn't change the fact I just mentioned though.

Anyway, I don't think we'll ever find any common ground samoth, if you keep drumming the "anyone who is against capitalism is a lazy loser that doesn't work and doesn't know how to save money" line, which is absurdly and demonstrably false, yet you keep repeating it anyway. Not to mention the "most bad things that happen in capitalism is poor people's fault anyway". We're on completely different pages here. I mean, your worldview is that poor people and the working class are sucking the capitalists' blood dry, and not acknowledging them as their benefactors, like they should. I don't think I can change such a perverse worldview in a forum thread, unfortunately.

(Btw, China is a capitalist country by now - just not a "democratic" one).

But that doesn't mean that making revenues stinks. Nor does owning, or owning more than you stink. What stinks is being deliberately fraudulent.

You have such a naively moralistic view, man. It's legal, and they're doing it, because they have the power to do it. *That is all*. But it stinks because it's..."deliberately fraudulent"? How can it be "fraudulent" if it's legal? Legal is legal is legal. Law is what is written on a piece of paper by some people who got the authority to write on it. That is all. What, they should opt *not* to rig the system in their favour, even if they absolutely can, because it's..."immoral"? What kind of childish thinking is that? Who gives a shit about what is "moral"? What kind of ruling class deserving of its name would *not* rig the system in its favour because they want to be "good and honest people"? Are you kidding me?

Maybe what stinks is owning so much capital and revenue(more than whole countries!) that you can completely rig the system in your favour. You yourself said what they're doing is LEGAL. But..."immoral", according to some nebulous concept of "morality". Well, they'll answer to...God, I suppose, at the End of Days or something. :P

Your idea of capitalism where people who are worth billions choose not to use the power those billions give them in order to rig the system and write the laws, so they are as protected as possible in case of failure, *does not exist*. Never did. In capitalism, money is power, and people with power are going to *use it*. They are going to wage wars if need be. It's that simple. It's not a case of a few "bad apples". It's embedded in the system. It's the essense of it. Using the immense power you got to protect yourself and gain more power is only natural.

When you see someone who is worth billions paying off politicians and law-makers in order to get his way you say "nothing wrong with owning billions, he should just be honest". I'm saying he shouldn't have that kind of money(and power) in the first place. If he's got them, using them is inevitable, and thinking otherwise is amazingly naive. It's funny how on one hand you say "greed is embedded in our genes", and on the other hand you expect powerful people not to use their power as they see fit and as their greed dictates, because of some vague "morality" and "honesty" concepts they have(?) to adhere to. Well, which one of them is it?

Pegging currency to another value removes the ability for governments to adjust the biggest economic controls like interest rates, cannot adjust value by buying or selling other currencies. Keeping a pegged currency means having a huge reserve of whatever the currency is pegged to and increasing value over time to keep up with inflation and price changes. With a gold standard that would mean keeping billions or trillions of dollars worth of gold in storage, constantly buying more gold over time as more is mined or as population grows and more currency is needed. Repeat this for every country.

Tying currency to something does lend some stability, and it does help level exchange rates with other currencies using the same value or backed by the same items. These are reasons some countries tie their currency not to gold, but to currencies like the US Dollar or the Euro.

The biggest reasons it was dumped are for those economic controls. Generally governmental interest rates range in the 4% to 10% range. Back in the 1970s and early 1980s trade and expansion were extremely high, so many governments raised interest rates eventually hitting about 20% for a few years to put the brakes on. With the economic collapse in 2007 most governments have been trying to accelerate the economy with very low rates, many hitting 0%, a few having negative rates to make investing even less attractive. These controls would not be available, or would be extremely limited, if the value of currency were pegged to the value of gold. It would be the gold traders (rather than the governments) that adjusts those values.

@[member='frob'] - Thank you.

It would be the gold traders (rather than the governments) that adjusts those values.

Aren't most central banks independent of governments -- usually mostly owned by a government and providing services to them, but in no way beholden to them?

So first, I don't know enough about the Gold Standard to understand why it had to be abandoned. But I did hear a rumor that the African Union was looking to adopt a Gold Standard of their own. The rumor also said that if they did then that would have sent the market-based economy that everyone else was using into a tailspin.

That's not a rumour... it's why we had Gadaffi killed and burned Libya sent back to the stone age. It would've removed a lot of French and American influence over their own monetary policies, as a lot of their trade is done in US dollars and French francs. Gadaffi happened to be proposing a gold-based currency as Africa has a lot of gold, but a fiat currency probably would've had the same political consequence for him.

Now, before you accuse me of being "contra anything social", let's get this right. I'm perfectly OK with helping someone who is, without being responsible for it, poor, needy, in trouble. No question about that. You lose an arm and a leg and cannot work? I'll be happy to pay for your life (while being happy that I still have both arms and legs). You need to go to hospital because [some undeserved illness that I wouldn't want to have]? Same thing. I'm happy to pay.

But if you are in trouble solely because you didn't care to work (save, prevent, provide...), then well... go die, sucker. You deserve what you get.

Oh, come on. How prevalent is this, really? Nobody has yet posted any numbers that would prove that this is actually a real problem, and not just arm-waving intended to justify cutting away social safety nets.

Oh, come on. How prevalent is this, really? Nobody has yet posted any numbers that would prove that this is actually a real problem, and not just arm-waving intended to justify cutting away social safety nets.

This probably has a slightly higher impact than voter fraud.

Does anyone know anything about Universal Basic Income? In an industrialized nation such as the UK, Canada, or Australia, would it help your economy or send inflation toward the stratosphere?