cchooper

Personally, I don't disagree with the votes much. The witty sarcasm has been up-modded too much, which is a problem on all sites, but it was the most concise and least agressive post.

a) the memory manager cannot guarantee a consistent system state in the swap file

b) the kernel has no way of instantiating its own state from an image

These are hard problems, which is why the people working on them usually start from scratch: http://www.eros-os.org/eros.html

It's also worth pointing out that bank runs are incredibly rare events. In a correctly functioning market, a bank can always pay its depositors by securitizing its loans. In a dysfunctional market (such as now) there are usually government guarantees that help smooth the process. The big problem with banks at the moment is that they have been keeping insufficient capital to cover their losses. Insufficient reserves has not been a problem.

Please explain to me how a bank can create base money, which is exclusively issued by the central bank.

* The bank is allowed, to lend a multiple of that $10.

False! The bank can lend only a fraction of that $10. However, if the borrower deposits that money back in the bank (i.e. makes a loan) then the bank can lend the money again, just like with normal borrowing.

Banks are not doing anything different to this. They are just loaning the cash deposited with them. Although the original $10 loan will eventually lead to $100 being created, it has also lead to $100 dollars worth of loans to banks. There's no scam here, it's just the way that debt works. It's no different to people loaning money to each other.

If you deposit $10 then, assuming a 10% reserve rate, the bank will keep $1 and loan $9. In return, you get a $10 bank balance, so the money supply has increased by 10$.

However, the money that was created cannot be loaned again. You can't loan your bank balance to someone else, and neither can the bank. However, the remaining $9 cash can be re-deposited by someone else. Again, the bank keeps 10% and lends the remaining $8.10, creating a $9 account in the process. Then the $8.10 can be re-deposited and so on. The total amount of money that can be created is therefore given by the equation

  m = d/r

http://en.wikipedia.org/wiki/Fractional-reserve_banking#Mone...

What confuses everyone is that in normal circumstances, banks don't give cash-in-hand loans. Instead, they open an account for the borrower, who has the option of withdrawing that cash, but will probably leave it there. In effect, the $9 has been immediately deposited back at the bank, where it can be reloaned. This doesn't really change anything though. It just means that the same bank is reloaning the money rather than a different bank. The total money loaned to the bank is effectively $19 (the original $10 plus the borrower who has loaned their borrowed money back again). If the borrower transfers the money to another account, then a different bank will hold the money, but it makes no overall difference to the system.

But perhaps it would be better not to be confronted with your score every time you log in.

I also don't understand the term 'contrary to reason'. How can a set of conventions be rational or irrational? They can be beneficial, harmful, fair, unfair, moral, immoral etc, but how can they be contrary to reason?

Also: taxation is as much a part of capitalism as it is a part of socialism, especially taxation for expenditure on police and law.

Capitalism vs. socialism is not an example of free exchange vs. force, but of two different standards of when force is appropriate.

To look at it another way: Keynes argued that no one can manage the market, including the market itself. But that doesn't mean it can't be managed better than it is.

Of course, I'm just being pernickety, but that's how I am :)

A separate issue is that people can't lower their wage demands to any level. To get a job you must have a home, a means of commuting and the basic necessities of life. There are also costs associated with employing someone, so even if someone worked for free, the employer could not necessarily justify the cost of employing them.

These are theoretical issues though. The existence of unemployment benefit means that the only people who will reach these depths are the homeless.

What? I completely fail too see what your point is here. Why would my management ask me to work 10 extra hours a week? What does that have to do with deflation?

> Well they're certainly avoiding the whole "pushing up" part.

How come rates go up then? What evidence do you have that they're 'avoiding' the pushing up of rates? Where is all the consumer inflation that they are allegedly creating?

> If they were smoothing the cycles out in a sustainable manner, we wouldn't be talking about negative interest rates.

Yes they would, because we are entering a potential depression. Smoothing out means cutting when things are bad and increasing when things are good. You have to act at both ends to achieve stable prices.

> Instead, they lower interest rates and keep them there because economic reality is politically inconvenient.

You are very good at making outlandish claims and not so good at backing them up. What evidence do you have that central banks have departed from their mandated inflation targeting regime?

> How much of this can be attributed to natural technological progress

Almost all of it, but technological progress cannot happen without a stable economy. People don't build factories unless they believe they can realise a steady income.

> And what percentage of the excess wealth (compared to an undriven economy) has been actually used to raise people out of poverty?

We do not live in a driven economy. We live in an economy where the value of money is kept stable in order to counteract the economy's natural tendency towards boom and bust. What do you mean when you say the economy is 'driven'? Give an actual economic definition of this term.

> It's not sustainable progress to get the masses out of poverty if you've used up most of the natural resources in the process.

Sustainability is entirely orthogonal to monetary policy. Neither have any affect on each other,

> The person who borrowed is the second recipient, the bank takes the first cut through fees and increased interest

No, they are the first recipient. Why do you say they are the second? They get the money first, therefore they are the first recipient. The bank gets interest, but interest accrues after the loan has been made. Your claim makes no sense.

> The government gets to tap into the supply through perpetual deficit spending.

So once again, it appears that the borrowers are the first recipient!

Your last part shows you don't understand the economic laws of nominal pricing. There's no point me discussing this, as you could go and look up the theory yourself.

> why do they violently shut down competition?

They don't. Very few countries have laws restricting what currency you can use. Many people have created alternative currency systems. But very few people use them precisely because national currencies win in the market.

> which is why I'd like to stop the inflationary bubble policy

The current monetary policy of all the Western governments is inflation targeting (with the exception of the US, which uses a triple mandate, of which inflation targeting is the most important part). The intention of inflation targeting is to act as an anti-cyclical force in the naturally pro-cyclical credit markets. Left to their own devices, financial institutions would increase credit levels in good times and decrease them in bad times, producing a succession of bubbles and busts. Monetary policy acts against this by pushing up interest rates when it believes there is too much credit and pushing them down when there is too little. It's barometer of whether credit levels are too high or too low is some chosen measure of consumer inflation. In this way, monetary policy reduces the inherently boom/bust nature of financial markets.

There is no 'inflationary bubble policy'. The markets themselves have an inherent tendency towards bubbles. They have existed since the beginning of modern financial markets, long before the current monetary policies were put in place. The claim that central banks inadvertently caused the dot com crash, or other bubbles, is a hotly contested subject in economics. It is not at all certain that it's true, and in any case is something that requires years of study and masses of evidence to resolve. What is certain, however, is that there is no policy of producing bubbles or inflation. The policy is to prevent it. In terms of stabilising consumer prices, inflation targeting has been one of the most successful monetary policies in all history, and the economic growth that has been part of the Great Moderation has lifted millions of people across the world out of poverty. In fact, more people have been lifted out of poverty under inflation targeting than under any other period of stability in history.

> Well if you've got a problem with the "forcing", then how about just government subsidies of 5x salary to those who work 16 hours a day?

How would they pay for it? Presumably by allocating resources from elsewhere, producing no net benefit.

> Flooding the market with cheap money is the same kind of manipulation

Central banks do not flood the market with cheap money. Inflation targeting is a policy whereby the market determines the quantity of money in the economy, and the central bank sets interest rates to encourage or choke off demand for credit. The result is stable consumer prices, at which the central banks have been uncannily successful.

> there most certainly is a parasitic economy that receives all of the newly introduced money first

Money is created through bank loans. The banks and the government do not receive the money first. The person who borrows is the first recipient. If the total amount of credit in a day grows, then the central bank will have to increase the quantity of base money through the purchase of bonds. If it shrinks, then it will sell bonds to reduce the quantity. The first people to see this money are therefore people who trade in the bond market, not banks and not governments. As far as I am aware, there is no evidence that bond traders profit unduly from this. The central bank simply operates as another trader in the market.

> Furthermore, the wealthy are able to hire "asset managers" to help them avoid the inflation, while the little guys have their savings eroded.

This is one of the many reasons why inflation is a bad thing. I agree that inflation is bad. That's why I support inflation targeting. Its raison d'être is to prevent inflation and deflation. It is incredibly good at it.

> To maintain a stable price index while technologically influenced goods are dropping requires everything else to go up.

If the quantity and demand for money and the number of products on the market were fixed, then the decrease in the nominal price of one good would necessarily cause an increase in the nominal price of others. Even if every good were being produced at lower real cost (i.e. with less labour, material and capital input) the 'average' nominal cost of products would stay the same. So you are right, the price of other goods has to go up. That's not a consequence of inflation targeting, but a standard economic result about nominal prices.

This very much suggests that Clojure is trying to solve today's problems, not those 100 years in the future.

I'm not pandering to anyone. I'm pointing out that deflation is a transfer of wealth. I'm not judging it, just pointing out the economic fact.

> If one has wealth saved up, then what is the problem?

If you don't care about being unemployed then that's fine. All power to you. But most people do care.

> forcibly driving this process through overstimulating the economy is needlessly screwing over future generations.

Recessions do not increase people's overall savings. They force people into bankruptcy and reduce total wealth, now and in the future. Recessions screw over future generations.

> If your problem is withdrawal, the solution is to avoid engaging in the first place.

Almost everyone suffers in a recession, not just the people who caused it.

> Let's pass laws mandating that everybody must work 16 hours a day!

That would be a reduction in wealth, as people would be forced to make economic decisions they otherwise wouldn't. I would never support it.

> Instead, the excess wealth is siphoned off to the bankers and government, precisely through the inflationary sleight of hand that you are advocating.

This is just conspiracy theory nonsense.

And I'm not advocating inflation. I'm advocating a stable price level, the kind that has enabled the economic growth that has lifted millions of people out of poverty over the last decade. Inflation and deflation are both bad. However, if we are forced to choose one or the other, it is better to choose inflation.

> Natural resources stay in the ground and people enjoy time off

Unemployment is not time off, nor is it delayed gratification.

> My point about electronics is that people delay purchases, but don't stop altogether

Yes, they delay their purchases, causing a contraction of the economy that creates real suffering, hence a loss of wealth that otherwise could have existed. Consequently most of the purchases never happen, and are therefore not 'delayed' but lost.

> Prudence is healthy; instant gratification consumerism is not.

It is prudent for the individual and destructive to total economic output. Are you trying to deny that recessions reduce people's wealth?

> what word would you suggest?

How about 'falling prices'?

>And the term "general" is also defined.

Now you're just trolling.