[DcifrThs]

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I'd love to see some real economists or finance people debate the economic model presented in Silent Weapons for Quiet Wars, using a model of electricity for economics. If that's a real possibility, then I think the FED is to be hated.

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DcfirThs is a real finance person. He's probably one of the best contributors in Business, Finance and Investing. The problem with this thread is, DcfirThs has a much better understanding of conventional economic theory than any of us, but he is unfamiliar with Austrian theory. What this thread amounted to was each side trying to hash out their theory to the other side which doesn't understand it well.

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here is the post i made about the AC (which i thought was some kind of abbreviation for Austrian economic thought, but now i think means something else more specific)

anyways, here it is with a few changes:
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overall, the thread was very illuminating. i've been reading a lot more on AC (i assume that is soem abbreviation for Austrian economic thought...if not, when i say AC i mean austrian economics).

the problem, is that basically everybody i've seen post who believes in AC fully also believes that the fed is the main problem and that the affect of distortions caused by the fed are way more costly than distortions caused by NOT having the fed.

this stems from the hate for any fiat money system. you can argue this point all day, and logically we can even have a monetary system backed by wine, but in the end i think the flexibility allowed by a fiat system far outweighs the distortions it causes and that the distortions caused by a system backed by anything that can't be quickly increased or decreased will be larger.

i believe in a lot of what AC says (free markets, no/limited intervention), but the fed is another institution not responsible to the US Govt and is only connected in so far as its initial funding and the appointments to the board. i think the fed does a good job managing the monetary system we have and that a good deal of stability can be attributed to its recent learned lessons and ability.

i definitely believe that i (and all others) shouldn't be paying for US sugar producers to survive and all other US govt. subsidies and all other market interventions, with a few exceptions. AC believers i think (correct me if i'm wrong) believe that when the cost/benefit analysis of clean fuels and green business become attractive, that participants will act accordingly. so, the govt. shouldn't subsidize anything (i.e. just stay completely out of hte market) that would force them to do that (or make laws accordingly).

personally, i think enforcing laws (like carbon emissions etc.) and issueing subsidies that make companies do this now before it is too late is a necessary "evil" of govt intervention in the markets.

in all other aspects (aside from the fiat money thing/the fed and the "necessary" interventions of the govt), i think AC is very well founded in that the govt, in almost every case, shouldn't hamper markets as govt interventions always have a) unintended concequences, and b) rarely, if ever, been able to even accomplish the final goal of the intervention (currency pegs etc. etc...they all fall apart). protectionism is attrocious etc. etc.

i do hold universal judgement aside and make statements like "almost every" because i think there are times and places for govt intervention. i.e. when a new or small country wants to remove obstacles from its, until then, closed economy, a peg may be necessary to ensure stability and reduce frictions on businesses not used to a floating exchange rate initially. then it might make sense to have a peg for a while.

also, i firmly and wholeheartedly believe that almost any theory that believes in solid absolutes is too strict, and most likely wrong in that firm belief. as humans, we have been proven wrong in our most highly regarded beliefs time and time again. so anything that says "THIS IS IT" i hold to an exceptionally high standard of proof. there are, of course, exceptions, and those theories that pass that standard of proof for me... (theory of evolution in my mind can say for sure etc.)

anywyas, thats another topic for another time.

Thanks again for the enlightening discussion,
Barron