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Discussion Starter · #1 ·
I was asking myself some questions today about the amount of money in circulation and what kind of effect that has been having on the national and world economy. What I saw was a familiar pattern, exponential growth, in both the amount of money circulating worldwide, and in the population. I wondered how the two might relate.

Here's a typical graph of the amount of currency (just the physical ones) in circulation, measured in USD (the relation to gold mining in black isn't directly pertinent):


And a typical graph of world population which most are probably familiar with:


An answer to the question I had, how do the growths of these two relate, depicting the amount of currency in circulation worldwide, measured in USD, as a function of the number of people on Earth, measured in billions:


Are we boiling in an overflowing pot of money? The amount in circulation is rapidly outstripping the pace of growth in the population. Circulating currency at 7% growth, and population growth at 1.8%. How long can this continue?
 

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Discussion Starter · #3 ·
We can look at just the US participation in this dilution of currency value. We're clearly printing dollars much faster than we're gaining people:


Would we not have a much more stable currency value if this were a near linear trend between the amount of circulating currency and the population? How is this accelerating profusion of money at all desirable?
 

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Since the creation of money is outpacing pop growth, there will be a stop-point. Also, I'd bet that money creation is at greater rate in more industrialized nations, where population growth is less and even negative in some cases.

Another thing to note is that quality of life isn't going up, so all this money is not going to the average Joe. It is staying with banks, sovereign govt's and super rich.

Domestically, I think that the charade can be kept going as long as people can eat. While we have the ability to print and expand EBT, there will not be internal problems (or rather, not be internal problems of great enough magnitude to collapse the system). However, the house of cards will fall from a different catalyst - bonds, loss of confidence in dollar, etc...
 

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You Cant Eat ......
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my concern isnt inflation, it is the rapid increase in taxes and fees at the local and state level. That will get you before the inflation will.
 

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Discussion Starter · #7 ·
Circulating currency at 7% growth,
Where does this figure come from???
A population doubles every ten cycles when it has just over 7% growth in each cycle. If you look at the amount of currency in circulation over time in both the world and US, the amount circulating doubles very close to every ten years, thus a 7% annual increase.
 

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well, inflation was pretty much flat last year. been relatively low for the past couple of years. until the economy really gets going again (which will be quite some time as things are now), i'm not that concerned with inflation.
 

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The Convicted Audiophile™
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well, inflation was pretty much flat last year. been relatively low for the past couple of years. until the economy really gets going again (which will be quite some time as things are now), i'm not that concerned with inflation.
:thumb:

For all of 2012 consumer prices climbed 1.7%, the third lowest rate in the past 10 years. That’s also down from a 3% increase in the prior year.
U.S. consumer inflation remains muted
Falling energy costs leave CPI unchanged in December
 

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Discussion Starter · #15 ·
Well now... do those numbers for inflation include: housing, food & fuel?
The official numbers strvger is referring to, no. Food and energy, two things people use and purchase more frequently than anything else, were removed from the official inflation calculations ~30 years ago. If you were to use the old calculation, and compare it to the one used today, we have around 10% annual inflation as opposed to 2%.

The difference there is losing half the value of a dollar every 7 years, vs every 35 years. Common sense and everyday experience tells me the old calculation is a lot more accurate.

From Shadowstats:
 

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The Convicted Audiophile™
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The official numbers strvger is referring to, no. Food and energy, two things people use and purchase more frequently than anything else, were removed from the official inflation calculations ~30 years ago.
The gasoline index declined again in December, but other indexes,
notably food and shelter, increased, resulting in the seasonally
adjusted all items index being unchanged. Gasoline was the only major
energy index to decline; the indexes for natural gas and electricity
both increased. Within the food category, five of the six major
grocery store food groups increased as the food at home index rose
for the third consecutive month.

Food...................... .2 .1 .2 .1 .2 .2 .2 1.8
Food at home............. .1 .0 .1 .0 .3 .3 .2 1.3
Food away from home (1).. .2 .2 .3 .2 .1 .1 .1 2.5
Energy.................... -1.4 -.3 5.6 4.5 -.2 -4.1 -1.2 .5
Energy commodities....... -2.3 .2 8.6 6.7 -.5 -6.9 -2.2 1.5
Gasoline (all types).... -2.0 .3 9.0 7.0 -.6 -7.4 -2.3 1.7
Fuel oil (1)..........
http://www.bls.gov/news.release/cpi.t01.htm
Please see lines 2 and 11....... :)
 

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Discussion Starter · #17 ·
CPI is not Core Inflation. The Bureau of Labor Statistics is not the Federal Reserve. The Core Inflation as calculated and reported by the Fed does not include food or energy.

So when the talking heads are blathering about how we had just 2% inflation for the year, and 2% is such a low number that the economy must be recovering, they are ignoring "volatile" market items such as food and energy.
 

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There is no limit

In what damage a printing press can do. I have in my hand a 50 Trillion Dollar note from Zimbabwe--. ( e-buy ) For domestic consumption, a fiat currency has no limits on how low it can sink but for oil, gold or international settlements there are limits on how much a currency can be debased before it is no longer used as a reserve currency. China is now buying oil in gold- have think on that as I believe this is a harbinger of the future of the paper dollar.

Laus Deo
overbore
 

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See... the point I was making, is that the gov't is soooo worried about how people will respond, if they knew ALL the numbers (as accurately as possible)... so it's in their interest to to fudge the "official" reports and shine manure publicly...

to keep the natives from getting restless.
 
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