Comments on: The Paradox of Deleveraging http://www.contrarianprofits.com/articles/the-paradox-of-deleveraging/4130 Access market-beating ideas from the world's top investment gurus on stock market investing, the gold market, ETFs, Forex trading and real estate values. Tue, 18 May 2010 05:09:46 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Louis Nardozi http://www.contrarianprofits.com/articles/the-paradox-of-deleveraging/4130/comment-page-1#comment-2544 Louis Nardozi Wed, 30 Jul 2008 22:07:53 +0000 http://www.contrarianprofits.com/articles/the-paradox-of-deleveraging/4130#comment-2544 That is quite possibly the stupidest thing I ever heard. Paradox of thrift, eh? Because when people save money, the bank buries it in a box in the desert right? It doesn't become the liquid deposit that lets the bank loan up to 10 times that amount, right? And that 10 times as much doesn't get loaned out to other people so the bank can make money off them, right? And the availability of money doesn't encourage new businesses to form, right? And those new businesses don't hire people, thereby helping to raise wages, right? Man, that's so stupid it stinks. Why don't you get Austrian and find out how the economy works. That is quite possibly the stupidest thing I ever heard. Paradox of thrift, eh? Because when people save money, the bank buries it in a box in the desert right? It doesn’t become the liquid deposit that lets the bank loan up to 10 times that amount, right? And that 10 times as much doesn’t get loaned out to other people so the bank can make money off them, right? And the availability of money doesn’t encourage new businesses to form, right? And those new businesses don’t hire people, thereby helping to raise wages, right?

Man, that’s so stupid it stinks. Why don’t you get Austrian and find out how the economy works.

]]> By: Damian http://www.contrarianprofits.com/articles/the-paradox-of-deleveraging/4130/comment-page-1#comment-2537 Damian Wed, 30 Jul 2008 12:41:13 +0000 http://www.contrarianprofits.com/articles/the-paradox-of-deleveraging/4130#comment-2537 Money is a commodity, it is not neutral and it is constantly re-valued in the market place against all other commodities. The more money taken of the market and simply stored or hoarded in the aggregate, the higher its valuation and purchasing power will be in the aggregate on the market relative to other commodities. When savings increase, aggregate price levels decrease, including wages. There is no diminishment in real incomes all things equal, but there is a steady increase in purchasing power available from savers who offer their savings on the market via the loanable funds market for future capital projects eventually leading to an increase in jobs, production and real (purchasing power) wages. Saving is purchasing power ready to be deployed at a later date and people’s individual subjective preferences against market price signals determine that date. There is no paradox and there is nothing dysfunctional about free markets. Unfortunately interventionist ‘economists’ (or political mathematicians with printing presses) think they know better, hence the economic pain and political upheaval approaching. Money is a commodity, it is not neutral and it is constantly re-valued in the market place against all other commodities. The more money taken of the market and simply stored or hoarded in the aggregate, the higher its valuation and purchasing power will be in the aggregate on the market relative to other commodities. When savings increase, aggregate price levels decrease, including wages. There is no diminishment in real incomes all things equal, but there is a steady increase in purchasing power available from savers who offer their savings on the market via the loanable funds market for future capital projects eventually leading to an increase in jobs, production and real (purchasing power) wages. Saving is purchasing power ready to be deployed at a later date and people’s individual subjective preferences against market price signals determine that date. There is no paradox and there is nothing dysfunctional about free markets. Unfortunately interventionist ‘economists’ (or political mathematicians with printing presses) think they know better, hence the economic pain and political upheaval approaching.

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