Germany Eyes Gold Standard

[Guest]

If these guys that dislike fiat currencies at least would try to base the value of currency on something tangible, like the average productivity of a worker, on the average factory output or on how many pounds of cheese is produced and consumed we would have something. But basing it on a insufficiently available commodity is about as smart as bringing a sword to a gun fight.

Fiat currency has an inbuilt flaw which makes it attractive for those who peddle it - it produces an income simply by controlling the supply. However that makes it intrinsically inflationary (in real terms) and that is on a compound basis - so its failure mechanism is built in. No Fiat currency has ever survived long term without periodic resets. They persist in resetting it because its the same old players creaming off the easy income.

That's playing us all for fools - and as you say some real tangable fixed baseline is the only way to build a real money supply that doesn't intrinsically destroy itself over a finite time span.

The secret would be to exclude the crooks who have been creaming the system for so long - but they have a sneaky way of selling their snake oil to a whole new set of fools.

Br Cornelius

[questionmark]

Are you daft? YOUR position is that currency is money, and HELLO???? Currencies change in value every day. You don't know what you're talking about but you have no chance talking to me.

No, I am not, but those who claim that a commodity is money because you can use it to barter should buy themselves a dictionary to learn the meanings if words.

Money is what is considered to be money.

[Guest]

Trying to make an arbitrary thing like gold into a currency is not a solution to the modern world. It is the central bank principle of fiat currency which is at fault. Create a baseline and hold the currency to it - all Fiat currencies would wither and die as a consequence. However gold is just an arbitrary yardstick which is in no way superior to the thing it attempts to replace and would lock poor countries into perpetual poverty.

Br Cornelius

[Yamato]

Fiat currency has an inbuilt flaw which makes it attractive for those who peddle it - it produces an income simply by controlling the supply. However that makes it intrinsically inflationary (in real terms) and that is on a compound basis - so its failure mechanism is built in. No Fiat currency has ever survived long term without periodic resets. They persist in resetting it because its the same old players creaming off the easy income.

That's playing us all for fools - and as you say some real tangable fixed baseline is the only way to build a real money supply that doesn't intrinsically destroy itself over a finite time span.

The secret would be to exclude the crooks who have been creaming the system for so long - but they have a sneaky way of selling their snake oil to a whole new set of fools.

Br Cornelius

They're not selling anything to anybody but the central banksters they're printing for. When did Americans vote for US monetary policy? We didn't vote for Ben Bernanke. The Fed isn't even the government any Keynesian circus clown will be the first to tell you that. It's a quasi private cancerous growth and it ruins all common sense and just consequence in the marketplace. You're not defending the middle class or the working man you're killing them! Income??? Income on a balance sheet. There's no value in a digital number on a screen. There's value in goods and services which are only created by W.O.R.K. Again, if creating real value were that simple, just print the money and stop working! Don't be one of the fools you speak of and buy it for a second!

[questionmark]

Trying to make an arbitrary thing like gold into a currency is not a solution to the modern world. It is the central bank principle of fiat currency which is at fault. Create a baseline and hold the currency to it - all Fiat currencies would wither and die as a consequence. However gold is just an arbitrary yardstick which is in no way superior to the thing it attempts to replace and would lock poor countries into perpetual poverty.

Br Cornelius

Not only poor countries, a world that grows by 88 million people a year cannot constrict its economic growth to a little over a trillion, and that is about the value of the new gold mined every year.

[Guest]

They're not selling anything to anybody but the central banksters they're printing for. When did Americans vote for US monetary policy? We didn't vote for Ben Bernanke. The Fed isn't even the government any Keynesian circus clown will be the first to tell you that. It's a quasi private cancerous growth and it ruins all common sense and just consequence in the marketplace. You're not defending the middle class or the working man you're killing them! Income??? Income on a balance sheet. There's no value in a digital number on a screen. There's value in goods and services which are only created by W.O.R.K. Again, if creating real value were that simple, just print the money and stop working! Don't be one of the fools you speak of and buy it for a second!

Fundamentally I cannot disagree and I have stated as much myself - but the Gold standard is not a sensible solution.

Money is a consensual fiction - but the rules are defined by us. Pinning it to a single commodity which in no way reflects any intrinsic value is just substituting one flawed system with another. Create a better consensual model and take it away from the magicians who currently define the rules to their own advantage. There is nothing in a Gold standard which meets that objective. As you say tie it to real work done - but in doing so admit that you are undermining the system of capitalism on which we have grown accustomed.

Br Cornelius

Edited September 25, 2012 by Guest

[Yamato]

No, I am not, but those who claim that a commodity is money because you can use it to barter should buy themselves a dictionary to learn the meanings if words.

Money is what is considered to be money.

No, you are going to own your words. You just suggested that money doesn't change in value. It changes in value every second. You have no clue what you're talking about. Its value doesn't get destroyed over time...when it's based on gold. This is an undeniable historical fact. You need to do some serious homework on the history of money before you talk about it because you've been indoctrinated by central bankers like Helicopter Ben who haven't been right about anything since the day their appointment began.

[questionmark]

No, you are going to own your words. You just suggested that money doesn't change in value. It changes in value every second. You have no clue what you're talking about. Its value doesn't get destroyed over time...when it's based on gold. This is an undeniable historical fact. You need to do some serious homework on the history of money before you talk about it because you've been indoctrinated by central bankers like Helicopter Ben who haven't been right about anything since the day their appointment began.

Money does not change, currency does. And currency is not money. Money is the vehicle used to exchange for goods other than goods bartered. That is basic economics. Very basic in fact. And what changes in value is the goods, not the money. Your dollar bill suddenly does not say 98 cents either. It might be that you get less for your dollar next week but that is not because the money changed value, that is because the commodities changed value.

No wonder you are on the gold rocket about to burst.

[Yamato]

Who is benefiting from this charade are the OWNERS. The more you own, the more money you make, and that has always been true to a degree but it's never been more true than it is right now. It isn't any surprise that the middle is disappearing and the wealth gap is growing unrestrained and under this crazy system more than ever before you don't even have to work to milk and bilk it out of someone else who does. It's rewarding wealth invested in assets and it's effectively the biggest bank robbery in the history of the world and the banks are who's doing the robbing.

If you own something and inflation from this monetary madness keeps driving the prices of what you own higher (commodities, equities, real estate, debt) then you're making a mint off the backs of the poor and the now-squeezed lower-middle class who own nothing. If you own nothing, and 100% of your disposable income goes into bills every month, and all you've got is a paycheck that's being deleted in value more and more every day, you're being taken out back behind the tool shed and thrashed with a steel plated riding crop by your centralized masters.

[Yamato]

Money does not change, currency does. And currency is not money. Money is the vehicle used to exchange for goods other than goods bartered. That is basic economics. Very basic in fact. And what changes in value is the goods, not the money. Your dollar bill suddenly does not say 98 cents either. It might be that you get less for your dollar next week but that is not because the money changed value, that is because the commodities changed value.

No wonder you are on the gold rocket about to burst.

Give me an example of money. You're in the clouds and you need a reality check.

Learn the difference between nominal value and real value. You keep pretending real value comes off a printing press because you don't understand the difference. I would warn anyone not to listen to two words about economics from you.

I own hard assets. Gold, agriculture, real estate, energy, infrastructure and storage, competing currencies to name a few. Things that are actually demanded on the marketplace. Not monopoly money for crooked bankers who don't do jack squat for anyone but rob them.

[questionmark]

Give me an example of money. You're in the clouds and you need a reality check.

Learn the difference between nominal value and real value. You keep pretending real value comes off a printing press because you don't understand the difference. I would warn anyone not to listen to two words about economics from you.

I own hard assets. Gold, agriculture, real estate, energy, infrastructure and storage, competing currencies to name a few. Things that are actually demanded on the marketplace. Not monopoly money for crooked bankers who don't do jack squat for anyone but rob them.

Money is one dollar bill, not much, but money. And now you are going to tell me that this one dollar bill buys you less gold than it did 2 years ago. Where I agree, but the value of that gold is still measured by that one dollar bill making the one dollar bill the money and gold the commodity and the dollar bill remains being one dollar no matter how high or how low a commodity goes.

By you somewhat awkward understanding of economics you could also claim that petroleum is a currency. After all you need more dollars to buy it now than two years ago.

Shesh.

[Guest]

Give me an example of money. You're in the clouds and you need a reality check.

Learn the difference between nominal value and real value. You keep pretending real value comes off a printing press because you don't understand the difference. I would warn anyone not to listen to two words about economics from you.

I own hard assets. Gold, agriculture, real estate, energy, infrastructure and storage, competing currencies to name a few. Things that are actually demanded on the marketplace. Not monopoly money for crooked bankers who don't do jack squat for anyone but rob them.

The world cannot work on real assets as it requires an arbitrary intermediary to facilitate trade. The problem is the choice of arbitrary currency - not the fact that we have to use one.

A Gold standard is just not flexible enough. It is a bolt hole in uncertain times - but not fit for the purpose of a real tradeable currency.

Br Cornelius

[Little Fish]

how do you stop bankers and their governments from printing digital currency effectively robbing the less wealthy by diluting the currency?

that is the current problem as i see it.

investment banks should not be allowed to speculate with public money, bring back glass-steigal and the banks would have far less leverage over governments for bailouts. they go bust that's their funeral, and that's capitalism. when they hold public money as hostage and get these bailouts to further speculate up everyday essentials, it's not capitalism anymore, it's fascism - they keep the profits if they make money, and the public pay off the losses if they lose money. segregate and isolate the risks the bankers take away from the public money supply. separate commercial banking from investment banking.

[Little Fish]

Money is one dollar bill, not much, but money. And now you are going to tell me that this one dollar bill buys you less gold than it did 2 years ago. Where I agree, but the value of that gold is still measured by that one dollar bill making the one dollar bill the money and gold the commodity and the dollar bill remains being one dollar no matter how high or how low a commodity goes.

By you somewhat awkward understanding of economics you could also claim that petroleum is a currency. After all you need more dollars to buy it now than two years ago.

Shesh.

it is basic supply and demand, if you increase the supply of something you decrease its value, so what is going to happen if you increase the money supply by printing more currency? - you decrease the value of the currency. if you decrease the value of a currency then everything else is going to go up in value in relation to it - called inflation - its economics 101. gold cannot be printed out of thin air so tying a currency to gold or something else as practical and stable as gold effectively prevents infinite printing, suppressing wealth transfer from the poor to the already wealthy.

[Guest]

it is basic supply and demand, if you increase the supply of something you decrease its value, so what is going to happen if you increase the money supply by printing more currency? - you decrease the value of the currency. if you decrease the value of a currency then everything else is going to go up in value in relation to it - called inflation - its economics 101. gold cannot be printed out of thin air so tying a currency to gold or something else as practical and stable as gold effectively prevents infinite printing, suppressing wealth transfer from the poor to the already wealthy.

But the USA holds the most Gold so tying a currency to the arbitrary commodity of Gold simply ensures their hegemony - despite the fact that they have been the main contributors to debasing the world reserve currency. Its just not fair to the rest of the world who haven't p***ed away all their intrinsic wealth.

Br Cornelius

[Little Fish]

But the USA holds the most Gold so tying a currency to the arbitrary commodity of Gold simply ensures their hegemony - despite the fact that they have been the main contributors to debasing the world reserve currency.

when the dollar falls as a reserve currency, then the US will have to compete in a fairer marketplace.

gold reserves come and go as it did with britain 100 years ago. if the US does not provide anything the world wants they will end up transferring the gold to the people and countries that do provide what the world wants.

Its just not fair to the rest of the world who haven't p***ed away all their intrinsic wealth.

I don't understand this.

gold is intrinsic wealth.

[Yamato]

Fundamentally I cannot disagree and I have stated as much myself - but the Gold standard is not a sensible solution.

Money is a consensual fiction - but the rules are defined by us. Pinning it to a single commodity which in no way reflects any intrinsic value is just substituting one flawed system with another. Create a better consensual model and take it away from the magicians who currently define the rules to their own advantage. There is nothing in a Gold standard which meets that objective. As you say tie it to real work done - but in doing so admit that you are undermining the system of capitalism on which we have grown accustomed.

Br Cornelius

No, tying it to work has nothing opposite to do with capitalism. It has everything to do with letting the markets work. There's that word again. The market is me and the market is you. Let us "work".

The Gold Standard is a sensible solution. The Gold Standard achieved the Fed's alleged reason for existing which is stabilizing the dollar. This is an historical fact it is not something you can deny unless you have no knowledge of history and want to hope that I don't either. When we were under a Gold standard we didn't suffer from inflation in the goods and services we consumed. There was no grandpa telling his grandkids " Well when I was your age that pack of gum costed me a nickel." The only thing stable about the value of the dollar is its 99-year long trendline to zero since the Fed was created in 1913. The establishment that you can't stop inadvertently defending has bled the value of the wealth of this nation by almost 1% a year for coming up on an entire century.

No economics textbook is going to tell you or me or anyone that money is fiction so that bit is rejected. Gold has proven itself to have thousands of years of intrinsic value where no fiat currency ever could. It's the only money there is to survive the ages. It's never gone to zero in thousands of years. Fiat currency always goes to zero eventually. You have no historical (or moral) basis for having faith in fiat. Do you think politicians are honest? Look at the death and corruption and special interests all around you and tell me what you find so attractive and trustworthy in all that stink?

[Yamato]

Money is one dollar bill, not much, but money. And now you are going to tell me that this one dollar bill buys you less gold than it did 2 years ago. Where I agree, but the value of that gold is still measured by that one dollar bill making the one dollar bill the money and gold the commodity and the dollar bill remains being one dollar no matter how high or how low a commodity goes.

By you somewhat awkward understanding of economics you could also claim that petroleum is a currency. After all you need more dollars to buy it now than two years ago.

Shesh.

So money is only the US dollar to you! LMAO The Euro isn't money? Find someone in the Eurozone who will believe that! You know, all those people you rely on for your country's very economic survival. The irony kills.

Granted your crazy narrow definition of "money", the dollar, the value of the dollar has eroded over 95% in 98 years so don't lie to me that the value of money doesn't change. Some of the inflation of gold is attributable to the declining value of the dollar. Plenty of economists admit this. Gold doesn't rise in price so much that the value of fiat currencies goes down.

I never said that petroleum is a currency and inflation isn't money. You don't understand what I'm saying and by extension, economics. I can recommend some books for you that would help. You're dishonestly putting your thoughts into my mouth. Dollars are just one example of currency. Gold is the ultimate form of money because it can't be printed and its supply is constrained by factors that make it difficult to produce. The fact that gold and silver coins are easily transportable, last forever, and have a long and successful and unending historical basis as money makes it desirable. If it's not the best you need to make the case for what is. And fiat money and endless money printing ain't it when you're arguing behind the fact that the value of the dollar is 95% destroyed.

Our brain dead politicians are running around fretting about the inflation of oil prices when a dime based on silver can buy a gallon of gasoline. A dime, not $3.75. You've lost so much money by being so wrong for so long that I am sure you're bitter and so having to lash out at me for being so right. Even government's favorite stepchild oil and all the mumbling and bumbling about high oil prices is deflationary when you compare it to real money that doesn't get destroyed by central money printers and their printing presses. The Fed's funny money isn't worth the paper it's not printed on. It's just fallow fluff flowing into the economy and devaluing every single dollar that's already there, which used to be dollars that were earned by doing things that have real value by actually doing something besides adding magic zeroes to a balance sheet.

[ninjadude]

In case you haven't been paying attention, every American on a fixed income has been getting robbed by zero percent yields that can't match the rate of inflation

What inflation are you whining about?

[+and-then]

What inflation are you whining about?

The inflation that politicians hide by not including the costs of food and fuel in these numbers you show. Probably the two most important expenses of any household. And when the massive amounts of "liquidity" that have been put into the system finally have an effect we will either break EVERY ECONOMIC LAW that has existed to this point or we will experience a hyperinflation that will devastate the globe financially.

[acidhead]

First, the Deutsche Bank is a private company, therefore hardly a policy maker. Second Germany has only a small voice in what the trend for the currency will be as they are member of the Euro meaning that the ECB makes the monetary policy and third but not last, this is another piece of disinformation thrown around by the gold hamsters who need some gullible to buy their overvalued stash.

Nobody who has any idea of the economy is going to go back to the gold standard because the amount of people on this planet and the issuing economy has outgrown all gold on this planet.

and at the same time the money supply has been inflated by the very individuals who are now saying we cannot go back to hard currency... it's been a scam from the start

[Yamato]

Not only poor countries, a world that grows by 88 million people a year cannot constrict its economic growth to a little over a trillion, and that is about the value of the new gold mined every year.

So fractional reserve banking is okay but fractional reserve BACKING is not. How convenient!

And you didn't correct the post you replied to. Whoever takes the lead in setting the gold standard, other currencies will want to emulate that effort, which may be a currency peg similar to Bretton Woods. The US dollar still has echoes of being the reserve currency of the world but that is coming to an end. The way you "fiat hamsters" imagine up how a gold standard will work is ludicrous but if it makes you sound more reasonable...at least there's a motive.

[Guest]

No, tying it to work has nothing opposite to do with capitalism. It has everything to do with letting the markets work. There's that word again. The market is me and the market is you. Let us "work".

The Gold Standard is a sensible solution. The Gold Standard achieved the Fed's alleged reason for existing which is stabilizing the dollar. This is an historical fact it is not something you can deny unless you have no knowledge of history and want to hope that I don't either. When we were under a Gold standard we didn't suffer from inflation in the goods and services we consumed. There was no grandpa telling his grandkids " Well when I was your age that pack of gum costed me a nickel." The only thing stable about the value of the dollar is its 99-year long trendline to zero since the Fed was created in 1913. The establishment that you can't stop inadvertently defending has bled the value of the wealth of this nation by almost 1% a year for coming up on an entire century.

No economics textbook is going to tell you or me or anyone that money is fiction so that bit is rejected. Gold has proven itself to have thousands of years of intrinsic value where no fiat currency ever could. It's the only money there is to survive the ages. It's never gone to zero in thousands of years. Fiat currency always goes to zero eventually. You have no historical (or moral) basis for having faith in fiat. Do you think politicians are honest? Look at the death and corruption and special interests all around you and tell me what you find so attractive and trustworthy in all that stink?

I have said that fiat currency is the problem - so your arguments are misdirected.

All money is a consensual fiction - even gold. We simply agree to believe that it has some arbitrary value.

I just think you are fundamentally wrong in assuming that Gold is the magic solution to our current problems. It is as arbitrary as anything you decide to peg your money to. It would be equally valid to peg it to Iron - its just that one is shinner than the other.

I say peg it to something of real value such as the vale of work or food - things that have real meaning rather than fixating on a piece of metal with no intrinsic value beyond its role in electronics and jewelry.

It undermines capitalism since capitalism as it currently functions is based upon creating value out of sentiment and thin air which can only be done with a currency with no fixed value. It is capitalist speculation which has been partly responsible for expansion of the money supply.

Br Cornelius

[Little Fish]

I have said that fiat currency is the problem - so your arguments are misdirected.

All money is a consensual fiction - even gold. We simply agree to believe that it has some arbitrary value.

the marketplace decides its value just like everything else. economics 101. if you dictate an unrealistic value for something, then things go haywire.

I just think you are fundamentally wrong in assuming that Gold is the magic solution to our current problems. It is as arbitrary as anything you decide to peg your money to. It would be equally valid to peg it to Iron - its just that one is shinner than the other.

iron corrodes as much as fiat money. try accumulating iron for your retirement, where would you be in 99 years? same as if you had accumulated fiat currency.

iron is abundant, the iron supply would grow as much as much as fiat currency after 100 years. so a choice between iron or gold? no contest.

I say peg it to something of real value such as the vale of work or food - things that have real meaning rather than fixating on a piece of metal with no intrinsic value beyond its role in electronics and jewelry.

how do you peg a currency to the value of work? what does that even mean? you peg it to the average salary? so you peg money to money? confused.

food rots, the value of food can be manipulated simply by monopolizing farmland and restricting or expanding production, just like fiat currency. you want something whose quantity cannot expand or contract at the will of some greedy b*******. you would have the same problems as fiat currency and the money addicts and their political enablers would see you starve before their profits are affected. gold or food? no contest.

It undermines capitalism since capitalism as it currently functions is based upon creating value out of sentiment and thin air which can only be done with a currency with no fixed value. It is capitalist speculation which has been partly responsible for expansion of the money supply

fiat dollars are not value. value is what the market sentiment decides is value. you don't print value out of thin air and you can't buck the market even if you own all the guns. speculation does not increase the money supply, increase in money supply feeds the speculation, a currency backed by something tangible and a seperation of investment banking from commercial banking would prevent hysterical speculation.

[questionmark]

and at the same time the money supply has been inflated by the very individuals who are now saying we cannot go back to hard currency... it's been a scam from the start

If you want to go back to hard currency first you have to find a hard counter-value, which gold is certainly not. Or atr least not as long as it can be freely traded.

Edit: Besides that, it is not the wisest idea to substitute fiat currency to currency with a fiat gold standard. That would be the same in blue.

Edited September 26, 2012 by questionmark