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The Great Depression (NEW CONCEPTS)
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Ishmael


In: Toronto
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I'm surprised no one is picking up the story.
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Mick Harper
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In: London
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The problem is that you are trying to run a statistical exercise with just two imputs, neither of which can be pinned down with any certainty. This is what AE rails against when The Normals do it, which they always do when trying to explain the unfathomable (cos then everything or anything can be made to fit).

Your best bet is just to run with what you've got and see how it stacks up.
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Ishmael


In: Toronto
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Mick Harper wrote:
The problem is that you are trying to run a statistical exercise with just two imputs....


Not so!

We merely BEGIN with two inputs. Then we extrapolate and discover if the pattern holds.
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Wile E. Coyote


In: Arizona
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The cause of the Great Depression (until the next one)

The greatest attack on freedom ever.

http://en.wikipedia.org/wiki/Legal_tender


Depressions stem from the introduction of legal tender.


The man owed is forced by law to accept a commodity (money) from a bank or employer that is worthless.

If the man owed can insist on "good money" or another "medium of exchange" as opposed to "bad money" the depression does not occur.

The reason being is that good money/exchange will force the bad out of the system, long before things get serious the majority will exercise their right to chose good money over bad.

Treat your honest toilers as dullards, restrict their freedom, look what happens.

Paradoxical.

The Great Depression was caused by the restrictions on other forms of currency and the introduction of legal tender.
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Ishmael


In: Toronto
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I think this thesis will find support from what I will demonstrate. It may explain why the causes I point to had their effect.

But what is your proof? Do you see where I am going? Can you finish my argument?
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Wile E. Coyote


In: Arizona
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I now learn that Legal tender in the form of paper money is unconstitutional.....

http://bit.ly/ylOTMk

You can get a hint of where it all went wrong.

The problem though, was never about.... Gold/Silver/Paper or Salt......
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Ishmael


In: Toronto
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Damnit!

I think you have hit the nail on the head with this!!! I have a pattern that suggests a cause and effect relationship but I didn't know why A causes B. Now it's becoming clear. Maybe even obvious. Obvious in a way that makes one wonder how its not been seen before!?!? (which is always the way and yet one never gets used to it).
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Mick Harper
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In: London
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You never see Wiley and Ishmael in the same room.
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Chad


In: Ramsbottom
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I think he had help from the late, lamented Nemo.
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Wile E. Coyote


In: Arizona
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Mick Harper wrote:
You never see Wiley and Ishmael in the same room.



Ishmael only collects Rembrandts.

I only collect Pollacks.
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Boreades


In: finity and beyond
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Sorry, it must be the baggage I'm carrying, but I'm confused. Are we saying the cause was joining a gold standard, or leaving it, or a new paper money (Euro/Greenbacks) with no gold basis?

http://en.wikipedia.org/wiki/Gold_standard
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Wile E. Coyote


In: Arizona
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I did not think I had excess baggage until I read THOBR.

Then I read Jacobs Crackers.... (its in the library).

It was only then I realised the true extent of my baggage problem.....
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Ishmael


In: Toronto
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Boreades wrote:
Sorry, it must be the baggage I'm carrying, but I'm confused. Are we saying the cause was joining a gold standard, or leaving it, or a new paper money (Euro/Greenbacks) with no gold basis?

http://en.wikipedia.org/wiki/Gold_standard


Anytime there is a change in "official" currency, the new currency is introduced without any inherent value. This valueless commodity is sold by force by the state. This forced sale appears to be the root of the problem.

Why is this a problem? I speculate...

The new currency has zero (or near zero) value initially. All (or most) of the value it gains is squeezed out of the economy. The new currency absorbs this value but diminishes the value of everything it is used to purchase. The effect is hidden but inexorable. The value of everything is necessarily depressed by the forced exchange.

Now I am unsure if the currency has absolutely zero value or if it merely has a reduced value. My thought is that new currencies, if accepted by the state for purposes of tax payment, might have some minimal inherent value to start. The problem for the state, however, is that they can spend very little of the collected revenue -- not unless they force sellers to exchange goods and services for the new currency.

If I am correct, I see only one option. The state must introduce new currencies slowly and make their use/acceptance voluntary --- while accepting the new currency as tax payment. This means the state's purchasing power will reduce dramatically as a consequence. It will only grow as the economy grows, as new wealth slowly valuates the new currency.

New currencies gain their valuation only by absorbing wealth. They either suck up existing wealth or they valuate new wealth. If they take existing wealth, a depression follows.

And I have more evidence I've yet to present.
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Mick Harper
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In: London
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This, at last, is impressive.
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Boreades


In: finity and beyond
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Would I be wrong to regard Quantitative Easing as a valueless sleight-of-hand that changes the "official" currency as well?
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