Occupy Wall Street/occupy Federal Reserve

[BellePlaine]

Mike, isn't your farm example more likely to favor the wealthy then it does the poor? To take advantage of the inflationary model, don't you have to be able to buy a lot of stuff, especially big item stuff? The average person might be able to buy one farm, but the wealthy person could buy many farms.

If the gold standard maintains the wealth of the rich with a high degree of stability, could it not as equally maintain the wealth of the poor? Especially since FIAT clearly decreases the wealth of the poor.

[Lanval]

Mike, isn't your farm example more likely to favor the wealthy then it does the poor? To take advantage of the inflationary model, don't you have to be able to buy a lot of stuff, especially big item stuff? The average person might be able to buy one farm, but the wealthy person could buy many farms.

If the gold standard maintains the wealth of the rich with a high degree of stability, could it not as equally maintain the wealth of the poor? Especially since FIAT clearly decreases the wealth of the poor.

Sort of, if they were in to that sort of thing. In basic terms (just to keep the relationship clear)

Banker loans money to farmer
inflation
Banker gets back money from farmer

Now the Banker actually has less money than before (totally simple system), but the farmer owns real property whose value is essentially static in real terms (inflation will raise/lower the amount of money people will pay, but the perceived value is the same X acres = Y apples, regardless of monetary value).

The wealthy generally have their wealth in currency of one form or another (Wall Street); don't see too many cash-rich farmers.

*****************
That said; the banks charge interest to offset the potential loss, so it doesn't really work the way my simple example shows. In addition, yes, the rich have a ready supply of cash, so there's nothing stopping them from taking advantage of either inflation or deflation; they can play both sides as they like. The rest of live on the margins of economic vicissitudes, hoping that no great change comes our way. When it does (recession/depression) and values change dramatically, we, the little people get creamed. The rich don't.

In either case, gold standard or fiat, I suspect the real issue is that ready supply of cash. If you have money, you can game the system; if not, you are subject to its whims. It's hard for me to see how fiat money (i.e. worthless markers used to track financial exchange) really hurts the poor. Fiat more or less comes down to trust; any item would work just as well, as long as you trust the issuing agency. In fact, tokens were made in the early colonial period as trade markers because the mercantilist system created a steady drain of coins from the colonies. As long as people trust the guy issuing the markers, you can treat them as negotiable cash. For instance, suppose Microsoft started issuing Microbux in Redmond, to pay local merchants. Would other merchants take them? Yes, as long as:
1. They trust the issuer
2. They can be readily exchanged

Change either one of those, and things go south in a hurry, whether you're a individual or a country. When I was in Greece many years ago, the Greek government maintained an artificial exchange rate. In-country, it was 110 Drachmas to the dollar. Outside the country, the exchange rate was closer to 135 Drachmas to the dollar. You could walk around in the old town area of Athens, and people would approach you if they thought you were American, and offer excellent exchange rates (140 or more to the dollar) in order to get their hands on a stable currency. Both the Drachma and the Dollar were/are fiat currencies; the difference is, Greece didn't like the lack of trust, and having control over the largish number of tourists, were able to extract a premium. But there was plenty of gaming that system I bet, and the richer you were, the easier and more profitable it was, I'd guess.

That's all a lot of talk. Geez. I guess I could boil it down to the idea that the gold standard is highly conservative, and puts a premium value on holding gold/wealth. Most gold/wealth is held by the rich, so it benefits them more. As you point out, I suspect that's simply arguing that one system is tilted more than the other in favor of the wealthy. Either system works more to the advantage of the wealthy than the poor. Perhaps you or someone could clarify why the fiat system is particularly bad for the rank and file?

Best,

Michael L

[BellePlaine]

Perhaps you or someone could clarify why the fiat system is particularly bad for the rank and file?

First, I think that we might have different definitions of inflation because I don't think that I agree that what you are describing is inflation.

Inflation is a given over time, as long as the number of consumers stays equal to, or greater than, the amount of items (products, food, whatever people want to consume) consumed by people. Since population has been going up steadily since at least the 16th century, inflation is the outcome.

I think that you are describing the typical supply and demand for goods/services; your explanation doesn’t mention the VALUE of money which is the relationship between the volume of money to the availability of goods/services. Inflation is outcome of “inflating” the volume of money which creates higher prices because the VALUE of money has decreased.

I’ve now come to believe that inflation transfers wealth from the poor and gives it to the rich and here’s why:

When brand new money is created by governments and banks it, of course had not been spent yet. It is not in circulation so the value of this NEW money is based on the value of all money already in circulation. Once it is spent, the total volume of money is increased which decreases the value of money. In other words, the first time the new money is spent it has more value and can buy more stuff than the subsequent times it is spent. The 1% gets to spend the new money first; they are these guys:



The poor/99% are the ones suffering the loss from the value of their money caused by this new inflation. These guys:



This is why I now believe that FIAT benefits the 1% while a non-inflationary system is neutral, or in other words would benefit the 100%.

What do you think?

[Lanval]

When brand new money is created by governments and banks it, of course had not been spent yet. It is not in circulation so the value of this NEW money is based on the value of all money already in circulation. Once it is spent, the total volume of money is increased which decreases the value of money. In other words, the first time the new money is spent it has more value and can buy more stuff than the subsequent times it is spent. The 1% gets to spend the new money first;

I won't have time to watch the videos today, so I'll hold off anything else. The situation you describe above sounds like the gold standard to me, at least as I have understood it. Let me explain how I think the gold standard works, and see if you agree.

Under the gold standard, the amount of money in production has to have a 1 to 1 relationship to verifiable wealth. In other words, for every $100 in paper money, the country has to hold $100 in gold. In this case, printing new money (say an extra $50) would devalue everyone else's currency, because now that $100 gold has to somehow account for $150 in money. In other words, everyone's 1 dollar bill is now redeemable to the gov't for an amount less than $1 in gold, since there are 150 units of money in $1 increments, but only 100 units of gold in $1 increments.

Under the fiat system, any money printed is valued exactly the same as the old money; that's because there is no value to the money beyond the trust that other's have. In other words, whether the US Mint prints a million dollars or a trillion dollars, the value of the money is maintained by the trust that people have that the gov't will be able to pay it's debts, rather than how much gold it stores in Ft. Knox. So as long as people trust the US gov't not to default on its loans, and continue to produce value, our money is all equally valuable, regardless of how many bills are in circulation.

Of course, if the gov't just starts printing new money and paying its bills with that money endlessly, the trust will go down since people will see ultimately begin to suspect that no actual revenue is being generated (through taxes, duties, etc.) and that therefore, the money isn't trustworthy.

Go back to my imaginary token system. As long as the guy issuing tokens is perceived to be making money, his tokens will be taken on good faith ~ people know they can go to him to get other types of money, since is his revenue is good. If they start to suspect that he's gaming the books though, the value of the tokens goes down relative to other things (goods, other money, etc.) because people start to lose trust, figuring that if they take their tokens in, the issuer may not have enough money to pay all the tokens at the accepted face value (what people believed they were worth). If he opens up his vault and shows a whole lotta cash/gold/whatever people will take in trade, then the value goes back up, perhaps beyond the original claimed value, if people think that his tokens are safer/more stable/more trustworthy than whatever else they're using ~ Euros, Dollars, Yen or whatever.

By the way, the fiat situation I describe above is a simple version of the problem with Greece and the EU right now. They lied about their fiscal situation to get into the EU, then borrowed a whole lotta money based on that reputation. Now everyone has discovered the lie, and the value of the Euro is taking a hit as people (read: wealthy, money managers, companies) move their accounts into more stable trustworthy currencies ~ typically the Dollar, the Yen and a couple of other currencies.

***********************

That's my understanding, and it may be faulty. You've given me some videos to look at and think about, so I don't want to say anymore until I do that. May take a couple of days (it's the end of the term ~ I'm buried in grading) so please be patient.

Also, I'll figure out what definitions of inflation are out there from the economics POV and then we can decide what our operating definition ought to be ~ but I see your point, and I agree that the type of inflation I describe is caused by 2 things: 1. increase in demand vs availability; 2. Increase in monetary supply (what happens when the Spanish import bajillions of reals in gold/silver from the new world).

Best,

Michael L

[BellePlaine]

Sounds good Michael. I'll of course hang out until you get caught up!

In the meantime allow me to agree with this statement of yours:

Under the fiat system, any money printed is valued exactly the same as the old money; that's because there is no value to the money beyond the trust that other's have.

But then I'll go further and say that moment that the new money is spent and circulated it devalues the old money (now combined with the new money). Those that get to spend the new money do so at a higher value then the rest of us using the old money, thus we are transferring our wealth to the 1%.

If after doing this since 1971, I'm wondering if this has become a significant factor in the economic disparity between the rich and the poor.

[BellePlaine]

Sorry- I broadened the conversation without warning. I meant the guy who is happy now, in general, and the guy who is disgruntled now, in general. Not the guy who is happy with the bullshit banking situation and the guy who is disgruntled with it.

I am in the fight too, I was just having a moment where I realized that whether the economy is good or bad, whether the evil folks are running things or not, whether it rains tomorrow or doesn't... happy people tend to be happy regardless and bummer people like myself tend to be bummers.

I took a left turn without signaling. My bad.

Below is the transcript to a NPR/PBS report that I heard talking about conservatives being generally more happy then liberals. This is for fun, but check out the part where it reports that our political ideology regarding income inequality did not affect our happiness in 1974 but it does today. I wonder if going completely fiat in 1971 has anything to do with this...? I think that the inflation rate is the rate at which the wealth of the 99% (our savings/COGs/etc) is transferred to the 1%.

http://www.pbs.org/newshour/bb/business ... 12-09.html

Transcript
JEFFREY BROWN: And finally tonight, how do your feelings about economic inequality impact your sense of happiness?

NewsHour economics correspondent Paul Solman finds out.

IN-DEPTH COVERAGE

Making Sen$e

ARTICLE TOOLS
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FacebookTwitterDiggStumbleUponRedditDeliciousIt's part of his regular reporting on Making Sense of financial news.

PAUL SOLMAN: How happy are you, scale of one to four, one not at all happy, four very happy?

LORI SANDERS, American Enterprise Institute: I'm a four.

PAUL SOLMAN: A four?

LORI SANDERS: I'm very happy.

PAUL SOLMAN: Lori Sanders works at the conservative Washington think tank the American Enterprise Institute. A few blocks away, Occupy D.C.er Eric is on the more liberal end of the spectrum.

What number would you give yourself?

MAN: A one.

PAUL SOLMAN: Are you unhappy, do you think, because of the inequality, economic inequality in this country?

MAN: Well, yes.

PAUL SOLMAN: Study after study, it turns out, finds conservatives happier than liberals.

Yale social psychologist Jaime Napier has a theory as to why.

JAIME NAPIER, Yale University: Economic inequality really does affect people's subjective well-being.

PAUL SOLMAN: Napier's work has convinced her conservatives are happier than liberals because they think there's equality of opportunity in America.

JAIME NAPIER: One of the biggest correlates with happiness in our surveys was the belief of a meritocracy, which is the belief that anybody who works hard can make it. That was the biggest predictor of happiness. That was also one of the biggest predictors of political ideology. So, the conservatives were much higher on these meritocratic beliefs than liberals were.

PAUL SOLMAN: Liberals like the folks we found at Occupy D.C., who don't think the opportunities out there are equal these days. Their message is clear: The system is not fair.

WOMAN: Everybody here at this Occupy movement is here because they have had enough. So, they're angry. And chances are, you know, people here are very unhappy with the way that our society works.

WOMAN: I believe that things should be equal, or people should have more of an opportunity to become closer to the 1 percent, because, right now, it's like the 1 percent is the 1 percent, the 99 is the 99, and we kind of don't stand a chance.

PAUL SOLMAN: The conservative AEI staffers, on the other hand, think we do.

How many of you, on average, think Americans get what they deserve they deserve economically?

Reza Jan, who grew up in Pakistan, believe in Horatio Algerism for all, sort of.

REZA JAN, American Enterprise Institute: I would say not everybody is able to pull off those kinds of success stories. But, in this country, more than any other, for the work you do, you are able to better yourself.

PAUL SOLMAN: That's true no matter who you are, said Jesse Blumenthal.

JESSE BLUMENTHAL, American Enterprise Institute: The "pull yourself up by your bootstraps" notion works here more than really anywhere else in the world.

PAUL SOLMAN: Now, optimism alone doesn't determine contentment. Religion boosts happiness. So does marriage. But Napier's research accounted for that.

JAIME NAPIER: We adjusted for education, for income, for marital status, religion, people who lived urban vs. rural, all kinds of things. So, you know, on average, just your ideology alone is an independent predictor of your subjective well-being.

ARTHUR BROOKS, American Enterprise Institute: It is true that conservatives tend to be less concerned about income inequality.

Arthur Brooks, president of the AEI, and the author of "Gross National Happiness," agrees with Napier about the conservative happiness edge.

ARTHUR BROOKS: Conservatives think that fairness is one in which outcomes are based on merit and people start with more or less equal opportunities, or at least we're working for equal opportunities. If you believe those things, and you see that some person makes more than others or the top 1 percent is breaking away than the bottom 99 percent, that's not going to affect your happiness very much at all.

PAUL SOLMAN: But with the average wage flatlined and more than 28 million Americans still jobless or underemployed, do merit and hard work really drive success these days?

The late comedian George Carlin's viral video answer has become a liberal credo.

GEORGE CARLIN, comedian: The owners of this country know the truth. It's called the American dream, because you have to be asleep to believe it.

(LAUGHTER)

PAUL SOLMAN: Napier says American economic malaise of the past few decades disheartened everyone, but liberals most of all.

JAIME NAPIER: So, everybody was decreasing in happiness as there was more inequality, but liberals to a significantly greater extent than conservatives.

And, in 1974, the difference between liberals and conservatives on happiness wasn't statistically significant. It was, basically, ideology didn't predict happiness in 1974.

PAUL SOLMAN: And, today, it does?

JAIME NAPIER: And, today, it definitely does.
PAUL SOLMAN: How much happier are conservatives than liberals, on average?

JAIME NAPIER: It's about a half-a-point on a 1-4 scale.

PAUL SOLMAN: Now, it's not as if liberals are clinically depressed. Indeed, besides unhappy Eric, the liberals at Occupy D.C., a protest movement, after all, were a reasonably cheery lot.

How happy are you on a scale of one to four, one not at all happy, four very happy?

CRAIG HUDSON, Occupy D.C.: I would probably have to say three.

ALAN BALL, Occupy D.C.: I would say definitely three-plus.

PAUL SOLMAN: And there were even a few fours.

Ellie (ph), who declined to give her last name, rated herself a two-and-a-half on the happiness scale.

Is the economic inequality and growing economic inequality in this country something that has personally, emotionally disturbed you?

WOMAN: Absolutely, no questions.

PAUL SOLMAN: Alan Ball's three-plus came despite his concerns about inequality.

ALAN BALL: The reconciliation of inequality is very difficult to do, especially with the system that we have right now. But I have tried to get beyond that, because I don't want external things to affect my well-being. There's a temple of love right over there that we're going to put an altar in, and we're going to set up a sacred space where people can go in to have peace, to meditate.

PAUL SOLMAN: A temple a tad less inviting than the American Enterprise Institute, where, if not ecstatic, neither was any one of them below a three.

STUART JAMES, American Enterprise Institute: I'm about three-and-a-half, I would say.

REZA JAN: I would probably call it somewhere around a three-and-a-half.

JESSE BLUMENTHAL: It's probably somewhere between a three-and-a-half and a four.

PAUL SOLMAN: Alex Della Rocchetta, a three-and-a-half, Lori Sanders, you may remember, a full four.

OK, a ludicrously small sample, but, on average, our conservatives scored about half-a-point happier on the 1-4 scale than the liberals at Occupy D.C. And that's the very same half-point advantage found in the studies Jaime Napier cites.

No surprise to Occupier Craig Hudson.

CRAIG HUDSON: It's pretty obvious that conservatives represent the interests of the rich, I mean, for the most part. So, people with money generally are happier and generally like to say, well, I got to where I am because I worked hard or parents, whatever, and anybody else, well, they must not have worked hard enough.

STUART JAMES: If everyone was a conservative, we'd all be a lot happier, I guess, right?

PAUL SOLMAN: Probably, but not, says Arthur Brooks, because they are wealthier.

ARTHUR BROOKS: It's not true that conservatives are richer than Liberals. Liberals are actually richer than conservatives.

The reason that conservatives tend to be less concerned with income inequality is not because that they're ignorant. It's not because they're calloused. It's not because they have less of a sense of a morality. It has to do with the fact that they see the world differently.

PAUL SOLMAN: See it as a world of just desserts.

AEI staffer Stuart James:

STUART JAMES: I hate the idea of sitting around waiting for someone else to come and, you know, sweep you off your feet and save you from student loan debt or an underwater mortgage or whatever it is. You get what you put into something. If you're going to sit around and wait for someone to do it for you, you're going to be miserable, because it ain't going to happen.

PAUL SOLMAN: Folks at AEI think their vision of hard work and just desserts would, if applied, make everyone better off and even more equal.

LORI SANDERS: The inequalities do make me unhappy. I just think that I can contribute to making that better.

PAUL SOLMAN: Meanwhile, back among the so-called 99 percent, the hope is that a radical change movement will finally address the inequities of our era. And how does that make them feel?

CRAIG HUDSON: I am much happier here than I have ever been in Washington, D.C.

WOMAN: When you do band together and create something, it's very exciting and a very pleasurable experience.

PAUL SOLMAN: Thinking you're doing something about economic inequality, in other words, seems to make everyone happier, at least for the moment.

[dingo]

By the way, the fiat situation I describe above is a simple version of the problem with Greece and the EU right now.  They lied about their fiscal situation to get into the EU, then borrowed a whole lotta money based on that reputation.  Now everyone has discovered the lie, and the value of the Euro is taking a hit as people (read:  wealthy, money managers, companies) move their accounts into more stable trustworthy currencies ~ typically the Dollar, the Yen and a couple of other currencies.

....the other half the equation is that the Germans eagerly set up a system in which they could flood Greece et al with all sort of loans...so that Greeks et al could spend on importing German goods...which stoked the German production/export economy....both sides of the equation were disingenuous for their own selfish reasons....and both end up with equal share of the problem
....

[dingo]

Paper Money Collapse....48 min vid

http://www.adamsmith.org/blog/economics ... y-collapse

[dingo]

paper/fiat money vs gold/commodity



http://online.wsj.com/article/SB1000142 ... 06738.html

All paper money systems in history have failed. Either a voluntary return to commodity money was accomplished, or the system ended in hyperinflation and complete currency collapse. At present, the latter looks the more likely endgame for the latest fiat money experiment.

[RussellK]

paper/fiat money vs gold/commodity



http://online.wsj.com/article/SB1000142 ... 06738.html

All paper money systems in history have failed. Either a voluntary return to commodity money was accomplished, or the system ended in hyperinflation and complete currency collapse. At present, the latter looks the more likely endgame for the latest fiat money experiment.

It looks like you have to be a WSJ subscriber to read the article.

[BellePlaine]

Fiat is inflation. Inflation transfers wealth from the 99% to the 1%.

[dingo]

". I don’t think a crisis is entirely avoidable any more. The accumulated imbalances are already too big to unwind without any major damage to the wider economy. The choice is the following: 1) stop printing ever more money, return to ‘hard’ money and allow markets to set interest rates. This will most certainly start a process of liquidation that will surely include a number of big defaults. 2) continue to fight liquidation and price-corrections (labelled by the mainstream consensus ‘deflation’) at all cost. This requires ever more market intervention, in particular the printing of ever more money and the direct support of ever more asset markets and of banks and state borrowers directly by the printing press. This will not avoid liquidation forever but must lead at some point to a currency crisis. Both outcomes are painful but 2) much more so. The collateral damage for the healthy parts of the economy is considerably larger in scenario 2). If your question is whether a crisis can be avoided, I would say no. If your question is whether a total currency collapse can be avoided, I would say yes. I believe it is more likely that monetary authorities will continue to try and fight liquidation and deflation and will continue to print. The crucial question is when does the public lose confidence in the system."

http://papermoneycollapse.com/2011/11/t ... -bursting/

"Let’s step back and look at the problem, which in a nutshell is this: The dominant societal model of the second half of the twentieth century – the social democratic nation state with its high levels of taxation, regulation and stifling market intervention, and thus increasingly dependent on a constantly expanding fiat money supply and artificially cheap credit –is rapidly approaching its logical endpoint everywhere, not just in Europe: excessive and unmanageable piles of debt, systemic financial fragility and weak growth.

For many, including quite a few of those demonstrating under the ‘Occupy Wall Street’ banner, this whole mess deserves the label “crisis of capitalism”. That this is nonsense I explained here. What we are witnessing is not the crisis of capitalism but the failure of statism. The present system, certainly the financial system, has very little to do with true capitalism, and if financial markets are now being demonized for their failure to go on funding political Ponzi-Schemes, than this means shooting the messenger rather than addressing, or even understanding, the root causes of the malaise. As I said, this is also a time of great confusion. "

[steve74baywin]

Fiat is inflation. Inflation transfers wealth from the 99% to the 1%.

I haven't had time to get into this thread, and you all seem to be doing just fine.

But yes, Fiat is inflation, it has no choice, it is simple math. You can't keep dividing the pie
into more pieces, which mean each piece is smaller and expect the pieces to be of the same value.
It just ain't going to happen.

Our current economic system, especially that taught in school, adds a bunch of man made crap,
complicates and makes it seem like a system that is too hard to figure out, and it does make
it harder to figure out, but, the simple sound math is still there.

It benefits the 1%, or maybe the .01% even more.
To think that some people/families exist on the other side of that money.
Someone earns interest on all the money created for this country and other countries,
on the money for the gov of this country as well as money for the people of this country,
this money created out of nothing(expect the sweat of our labor), someone, some families
earn interest on this. When you are on that side of the equation money
takes on a different meaning. It becomes a controlling tool. Think about it.
They don't labor for the money, they create it knowing that many other people must labor for it.
They create and throw the scraps where then want it to go.
The money system is how they use people to create the world they want.
Gotta love the international banking families.

This thread is also suited for discussing our money system.
http://itinerant-air-cooled.com/viewtop ... 16&t=10082

[dingo]

" Money printing is the privilege of the state and its central bank. Money, in this system, is entirely elastic. But it is political money and closely linked to political authority. In a paper money world, if you cross a political border you have to swap your money for different money. All the efficiency of today’s 24-hours-a-day, multi-trillion-dollar foreign exchange market, which so easily impresses the untrained observer to whom it may epitomize global capitalism itself, is nothing but the market’s attempt to cope as best as possible with the inefficiency of monetary nationalism and monetary segregation that is the result of every national government wanting its own paper money under its own territorial political control.

To call this system capitalist means depriving the word capitalism of any meaning.

In this brave new system of fully elastic fiat money we put our financial affairs not in the hands of the unfettered market but in the hands of the state, of politicians and central bankers. This system is properly called a socialist one, not a capitalist one. And this system has failed. "

-d.s.

[steve74baywin]

To call this system capitalist means depriving the word capitalism of any meaning.

In this brave new system of fully elastic fiat money we put our financial affairs not in the hands of the unfettered market but in the hands of the state, of politicians and central bankers. This system is properly called a socialist one, not a capitalist one. And this system has failed. "

-d.s.

Bravo, it can't be said enough.
Once again the distortion of words.
Free market capitalism, I'm not sure when if ever we even had that in this country. Maybe before 1900.
People ignore, gloss over, or I don't what they do when I mention doublethink and say it is alive and well today.
But, this is another example of it. They know all the regulations and controls on the money system and businesses,
they then should know it isn't capitalism or free market capitalism, yet they say it, literally they have to bury a
truth and go with the falsehood while saying things like, see what happening over the last 5 years, free market capitalism doesn't work, as if we've had it, then when someone speaks of Ayn Rand wanting free market capitalism they say she is a kook, we don't want that, no, never, we can't go to that, then later in the day they blame what we have on the very system they acknowledged that we don't have and they don't want.
Doublethink
The definition http://en.wikipedia.org/wiki/Doublethink

“ To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which canceled out, knowing them to be contradictory and believing in both of them, to use logic against logic, to repudiate morality while laying claim to it, to believe that democracy was impossible and that the Party was the guardian of democracy, to forget, whatever it was necessary to forget, then to draw it back into memory again at the moment when it was needed, and then promptly to forget it again, and above all, to apply the same process to the process itself -- that was the ultimate subtlety; consciously to induce unconsciousness, and then, once again, to become unconscious of the act of hypnosis you had just performed. Even to understand the word 'doublethink' involved the use of doublethink.[2] ”


“ The power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them....To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just as long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies - all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.[2]