The US Dollar vs. The Gold Standard

[Yamato]

Paper is just as real as Gold. I am sorry to say that Gold is just a false security blanket which solves few of the real issues with money. Gold will be a fractional currency which leaves it open to just the same type of abuse as paper (infact the real currency will just be another form of paper). For all its supposed historical linage - the only form of Gold currency which has ever lasted long is one where Gold was the coinage - which aint ever going to happen again.

Br Cornelius

No, paper goes to zero again and again and again. It's a false hope that a proven failure is as "real" as something that's never failed. You can't print gold obviously so your latest claim that it's "open to the same type of abuse" is false.

Gold is money when you can exchange it on the open market for whatever other currency you want to buy whatever your heart desires. You can't do that with the "money" you've tried to peddle off as credible here lately. You can buy gold, sell gold, store gold, and save gold. The other ideas for "money" that can't be saved would be the most ruinous idea for an economy ever conceived. It's the last clueless gasp of abandoning the concept of working and saving which we need a lot more of in this economy if we're going to have sustainable growth and prosperity. The curtain has come up on this thread and the Keynesian werewolves revealed themselves beyond my wildest predictions. What sounded like a slightly reasonable tenor in the beginning has turned into a Keynes-on-the-brains menage de trois. Even Keynes and Greenspan exhibited caution in their theories and policies compared to the love affair with paper I've exposed here.

[questionmark]

Gold will be a fractional currency which leaves it open to just the same type of abuse as paper --BR

You are incorrect. In a fiat fractional reserve system the paper is abused because there is no restraint to print. In a gold standard the market determines it's fractional value through restraint of it's holdings. And more GOV ain't the answer. I know you know that.

If the gold price is controlled by the market then in a gold standard currency there is no constant value, if controlled by the government, who is to stop the government from assigning gold twice the value and print twice the money?

The only ones to benefit from a gold standard are the mining companies, everybody else will just get harmed by it, like in the past.

[Guest]

No, paper goes to zero again and again and again. It's a false hope that a proven failure is as "real" as something that's never failed. You can't print gold obviously so your latest claim that it's "open to the same type of abuse" is false.

Gold is money when you can exchange it on the open market for whatever other currency you want to buy whatever your heart desires. You can't do that with the "money" you've tried to peddle off as credible here lately. You can buy gold, sell gold, store gold, and save gold. The other ideas for "money" that can't be saved would be the most ruinous idea for an economy ever conceived. It's the last clueless gasp of abandoning the concept of working and saving which we need a lot more of in this economy if we're going to have sustainable growth and prosperity. The curtain has come up on this thread and the Keynesian werewolves revealed themselves beyond my wildest predictions. What sounded like a slightly reasonable tenor in the beginning has turned into a Keynes-on-the-brains menage de trois. Even Keynes and Greenspan exhibited caution in their theories and policies compared to the love affair with paper I've exposed here.

Gold is a commodity - not a form of money.

It has never worked as a stable long term form of money in the last 200yrs.

We are not living 2000yrs ago so the comparison is not in any way meaningful to say it worked in the past - which past ?

Br Cornelius

Edited October 9, 2012 by Guest

[Yamato]

OK. So I am curious.

If fiat is horrible, then why does every single soveregn nation use the fiat system?

Because the essence of government is power.

[Guest]

Because the essence of government is power.

And Gold solves that in what way ?

At this stage the whole discussion is all rather boring as no-one here is changing their position and no one here is learning anything new.

So unfortunately I am out.

Br Cornelius

Edited October 9, 2012 by Guest

[Yamato]

If the gold price is controlled by the market then in a gold standard currency there is no constant value, if controlled by the government, who is to stop the government from assigning gold twice the value and print twice the money?

The only ones to benefit from a gold standard are the mining companies, everybody else will just get harmed by it, like in the past.

You've got it butt backwards. The mining companies are benefiting right now thanks to you Keynesian lovers. Prices of what they're digging out of the ground are skyrocketing thanks to warfare/welfare Statists. I've never seen blindness to reality that I'm seeing here.

[Yamato]

Gold is a commodity - not a form of money.

It has never worked as a stable long term form of money in the last 200yrs.

We are not living 2000yrs ago so the comparison is not in any way meaningful to say it worked in the past - which past ?

Br Cornelius

Derp dee derp!

Now you're just lying. Watch the video and acknowledge reality already. Gold is a commodity and a sound basis for money because it uniquely enjoys the attributes you've learned about earlier in this discussion.

As the Deutsche Bank analysts Daniel Brebner and Xiao Fu said:

"While it is included in the commodities basket it is in fact a medium of exchange and one that is officially recognized (if not publicly used as such). We see gold as an officially recognized form of money for one primary reason: it is widely held by most of the world’s larger central banks as a component of reserves. We would go further however, and argue that gold could be characterized as ‘good’ money as opposed to ‘bad’ money which would be represented by many of today’s fiat currencies. In describing gold as such we refer to Gresham’s Law – when a government overvalues one type of money and undervalues another, the undervalued money (good) will leave the country or disappear from circulation into hoards, while the overvalued money (bad) will flood into circulation. In our view the ideal medium of exchange must balance the paradox of representing value while having little intrinsic value itself. There are very few media which can do this. Fiat currencies physically have no use other than that which is prescribed to them by government and accepted by the public. That fiat currencies cost little to produce is of a secondary concern and we believe, quite irrelevant to the primary purpose.Gold is neither production good nor consumption good. Jewelry we see as a form of storage or hoarding (the people of Portugal have all but exhausted their personal gold stores – hoarded in the form of jewelry – having converted them to survive the crisis). If gold did have a meaningful commercial use we believe that it would make the metal less attractive as a medium of exchange as the value of the metal in whatever market it was used in could periodically interfere with its medium-of-exchange role..."

[Yamato]

And Gold solves that in what way ?

At this stage the whole discussion is all rather boring as no-one here is changing their position and no one here is learning anything new.

So unfortunately I am out.

Br Cornelius

Because government can't produce infinite amounts of it. If you're out, don't leave with questions that you know will be answered on my thread. Good day.

[questionmark]

You've got it butt backwards. The mining companies are benefiting right now thanks to you Keynesian lovers. Prices of what they're digging out of the ground are skyrocketing thanks to warfare/welfare Statists. I've never seen blindness to reality that I'm seeing here.

The mining companies are benefiting because the gold hamsters are distorting the market, under normal conditions half of the mining activities would be uneconomical.

If there is a gold standard the governments would have to buy whatever they had to have a growing economy at whatever price. And that is how we will substitute the banksters for diggers. Or the old poor church thing: on Saint Thomas day we take the cloth of Saint Jerome so Saint Tom is not naked.

That is not a solution, that is yesterday's error.

Edited October 9, 2012 by questionmark

[Yamato]

The mining companies are benefiting because the gold hamsters are distorting the market, under normal conditions half of the mining activities would be uneconomical.

If there is a gold standard the governments would have to buy whatever they had to have a growing economy at whatever price. And that is how we will substitute the banksters for diggers. Or the old poor church thing: on Saint Thomas day we take the cloth of Saint Jerome so Saint Tom is not naked.

That is not a solution, that is yesterday's error.

Radical Keynesian nonsense.

"Gold hamsters" are a natural reaction to the quantitative easing that is distorting the money market with zero percent interest rates, and what appears to be permanent stagflation how many lost decades long? Life is short and I'm getting sick of this ponzi scheme prohibiting a real recovery. The value of our money should be determined by all of the hamsters and all of their interests, not government coercion demanding perpetual inflation to perpetuity.

The gold standard is a proven solution to stabilize the value of a currency, fiat tangents and blind faith in government notwithstanding.

[questionmark]

Radical Keynesian nonsense.

"Gold hamsters" are a natural reaction to the quantitative easing that is distorting the money market with zero percent interest rates, and what appears to be permanent stagflation how many lost decades long? Life is short and I'm getting sick of this ponzi scheme prohibiting a real recovery. The value of our money should be determined by all of the hamsters and all of their interests, not government coercion demanding perpetual inflation to perpetuity.

The gold standard is a proven solution to stabilize the value of a currency, fiat tangents and blind faith in government notwithstanding.

Just imagine for a moment that you had not sunk your savings into gold and the think about it rationally.

[Yamato]

Just imagine for a moment that you had not sunk your savings into gold and the think about it rationally.

I didn't sink my savings into gold. I held cash and got my a$4 handed to me thanks to Keynesian crooks and their supporters who are the ones actually buying and holding gold.

Duh.

[Yamato]

[acidhead]

If the gold price is controlled by the market then in a gold standard currency there is no constant value, if controlled by the government, who is to stop the government from assigning gold twice the value and print twice the money?

The only ones to benefit from a gold standard are the mining companies, everybody else will just get harmed by it, like in the past.

The market determines gold's value... not GOV.

In the past mining companies, like oil companies today, used GOV to influence the market for their own personal interest. They had something everybody wanted. But there is a huge difference. The product sought after today is simply a commodity on the market. Gold is not a commodity. It has real value. Value that will never vanish from the market. That's where we are today.

The only thing that happened in the past was we replaced what worked with what sounded good.

[+DieChecker]

Radical Keynesian nonsense.

"Gold hamsters" are a natural reaction to the quantitative easing that is distorting the money market with zero percent interest rates, and what appears to be permanent stagflation how many lost decades long? Life is short and I'm getting sick of this ponzi scheme prohibiting a real recovery. The value of our money should be determined by all of the hamsters and all of their interests, not government coercion demanding perpetual inflation to perpetuity.

The gold standard is a proven solution to stabilize the value of a currency, fiat tangents and blind faith in government notwithstanding.

I'm still confused as to how we are going to go on a Gold Standard. Do you mean that currency would be backed, or that all transactions would be backed? Because if just currency, that would help, but as with any partial measure system using gold, such as the Swiss had a tthe end, the markets and government still have significant influence. And if you mean a complete economy gold standard, where is all this gold going to come from?

I mean if the US now has about 8000 tons stashed away, it would need several tens of thousands, or maybe a hundred thousand tons to back our active economy. The cost of collecting all that gold alone would put the US economy into a tailspin.

[Yamato]

I'm still confused as to how we are going to go on a Gold Standard. Do you mean that currency would be backed, or that all transactions would be backed? Because if just currency, that would help, but as with any partial measure system using gold, such as the Swiss had a tthe end, the markets and government still have significant influence. And if you mean a complete economy gold standard, where is all this gold going to come from?

I mean if the US now has about 8000 tons stashed away, it would need several tens of thousands, or maybe a hundred thousand tons to back our active economy. The cost of collecting all that gold alone would put the US economy into a tailspin.

I'm saying back the US dollar with a gold standard. That would be the currency.

Nobody is going to want gold when the dollar is based on it because gold prices will go nowhere fast, and especially because nobody accepts gold for transactions. What little demand for gold there will be can easily be met and arrangements can be made in a modern economy to accommodate someone's request on the global marketplace. Conversely, people want gold under this fiat system and they want it badly. I would put an end to gold's rise and an end to this gold rush immediately if I could and yet I'm the hamster. If I was a gold hamster I'd be saying everything that questionmark and Br Cornelius are saying to keep the ponzi scheme going to perpetuity and make a mint for myself.

[+DieChecker]

I'm saying back the US dollar with a gold standard. That would be the currency.

Nobody is going to want gold when the dollar is based on it because gold prices will go nowhere fast, and especially because nobody accepts gold for transactions. What little demand for gold there will be can easily be met and arrangements can be made in a modern economy to accommodate someone's request on the global marketplace. Conversely, people want gold under this fiat system and they want it badly. I would put an end to gold's rise and an end to this gold rush immediately if I could and yet I'm the hamster. If I was a gold hamster I'd be saying everything that questionmark and Br Cornelius are saying to keep the ponzi scheme going to perpetuity and make a mint for myself.

But, isn't it also just as much a fact that whenever a depression or recession hits, people run to the banks and collect gold? Isn't that how the Great Depression got started?

What is the whole point to the Gold Standard anyway? To keep inflation down? Doesn't the fiat system allow the US to do this anyway? The only threat to that is if the world turns to another currency as the benchmark, which I'll give you, could happen. Yet, I can't see inflation really getting out of control with modern banking being what it is. It all revolves around a Conspiricy Theory that the Banking Gnomes are lulling us before they really reap the True Riches (Bwaa ha ha!!) and establish the NWO.

I just believe the world is a lot more egg white then that, and that fiat money will continue for another hundred years (In the US) with little trouble. Reading up on fiat money, I see where some nations degraded to trillions of units for a single dollar. But the conditions that caused those collapses just don't reasonably appear to be possible in the near or close distant future for the US. I just don't believe the Conspiricy, just as I don't believe the CIA killed Kennedy and the Moon Landings were fakes, and that Bush got the military to blow up the WTC in NY for 9-11.

[questionmark]

The market determines gold's value... not GOV.

In the past mining companies, like oil companies today, used GOV to influence the market for their own personal interest. They had something everybody wanted. But there is a huge difference. The product sought after today is simply a commodity on the market. Gold is not a commodity. It has real value. Value that will never vanish from the market. That's where we are today.

The only thing that happened in the past was we replaced what worked with what sounded good.

Which is precisely, as I am tired to repeat, the reason gold cannot determine the monetary value. Because the market would force the central bank to shorten or amply money supply according to the markets, not to the economical needs. The only viable way to do that is to barter actual gold for goods. But sadly there is not enough gold available on this planet to do that.

And, as I am also tired of repeating, a fiat gold standard is no different than a fiat currency. The only beneficiaries would be the mining companies as governments would be obliged to buy their gold at whatever price to enable economic growths. Exchange the banster for the minester. Brilliant idea.

[Yamato]

But, isn't it also just as much a fact that whenever a depression or recession hits, people run to the banks and collect gold? Isn't that how the Great Depression got started?

What is the whole point to the Gold Standard anyway? To keep inflation down? Doesn't the fiat system allow the US to do this anyway? The only threat to that is if the world turns to another currency as the benchmark, which I'll give you, could happen. Yet, I can't see inflation really getting out of control with modern banking being what it is. It all revolves around a Conspiricy Theory that the Banking Gnomes are lulling us before they really reap the True Riches (Bwaa ha ha!!) and establish the NWO.

I just believe the world is a lot more egg white then that, and that fiat money will continue for another hundred years (In the US) with little trouble. Reading up on fiat money, I see where some nations degraded to trillions of units for a single dollar. But the conditions that caused those collapses just don't reasonably appear to be possible in the near or close distant future for the US. I just don't believe the Conspiricy, just as I don't believe the CIA killed Kennedy and the Moon Landings were fakes, and that Bush got the military to blow up the WTC in NY for 9-11.

It's only how the great depression got started when you ignore what already happened and think the people were running on the banks for no reason.

Whether the US dollar survives for another hundred years is not of interest to me. What I'm interested in trying to fix is the horrible effects that massive government intervention into the markets will cause. A hundred more years of suffering the consequences of a failed policy is nothing I find morally acceptable or politically tenable.

Thanks for that trip into conspiracy theory. Always a trusty detour in a debate over policy.

The gold standard is easily administered. Undoing Nixon Shock would be a first official step. The idea being to get the dollar back on the map while it's still got the credibility left that it does. Market sentiment is everything and ultimately the market will win this argument too. The market always wins in the end and it always will. If mankind blows himself back to the stone-age, the market will still reign supreme, and more so than ever. Stop fighting it. Stop tearing the bed like little piggies and then squealing because it got ripped, Keynesians. That's not asking for much.

[Guest]

A market fundamentalist Ah!

I like my fundamentalists in the religious flavour - there far more entertaining

Br Cornelius

[Yamato]

A market fundamentalist Ah!

I like my fundamentalists in the religious flavour - there far more entertaining

Br Cornelius

When you get a $700,000 medical bill in the mail that your "insurance" got for you, and your life is destroyed and your entire family is wiped out financially, you can woot all the way to the welfare line then. You can receive some of what you're asking for, instead of quietly and politely handing it all over to the financial class like an indoctrinated obedient worker.

Crony capitalism and State capitalism are the problem. The Gold Standard is an important solution. It will put the clamp down on the ability these crooks and murderers have, these suit wearing policy makers who get away with it have, to run our country into the financial ground. It means trillions of dollars less for starting wars and imposing bureaucratic will upon others creating hatred and resentment against us. We give welfare away like it's going out of fashion in this country and the world doesn't respect us anymore. It shows no gratitude. Fear is the only motivator that works and I'd like to see a lot more conquering of enemies through friendship and trade than bribes and bullets.

Returning the government to our Constitutional roots, applying good legislation like trimetallic standards and balanced budget Amendments are becoming more and more necessary to keep America strong. As our dollar erodes so does everything else that happens economically in dollars. These underlying economic truths matter to me and so I want to apply our policy accordingly.

Alliance with none; commerce with all should be our motto. That's the effective motto of a major world power. When all we are is a trading partner to the foreigners who now hate us, our welfare will become grateful again. When we set a good standard, the rest of the world will want to emulate us, and the democracies throughout the world are a powerful reminder of that.

It shouldn't be hard to understand that the marketplace should determine the price of oil, not endless commercial wars and back-rubbing bribes with disgusting oil barons who treat their people like dogs.

Edited October 10, 2012 by Yamato

[Guest]

You see - I see the market as the problem. All markets gravitate to a quasi Fascistic amalgam between state and corporation - its part of the genetics of capitalism.

This is why I find market fundamentalists to be vaguely comic since they pine for a perfect state of free market capitalism which has never existed in anything other than a text book.

Its fundamentally no different to the Theocratic state - all very good in theory - but never quite achieved perfectly enough to deliver the goods in reality.

As I have said before - I am a reality pragmatist - whatever delivers the goods.

Br Cornelius

[Yamato]

You see - I see the market as the problem. All markets gravitate to a quasi Fascistic amalgam between state and corporation - its part of the genetics of capitalism.

This is why I find market fundamentalists to be vaguely comic since they pine for a perfect state of free market capitalism which has never existed in anything other than a text book.

Its fundamentally no different to the Theocratic state - all very good in theory - but never quite achieved perfectly enough to deliver the goods in reality.

As I have said before - I am a reality pragmatist - whatever delivers the goods.

Br Cornelius

Accepting today's reality after all the power grabs are made, pragmatically accepting whatever works after whatever smoke and fires are started, is the most docile and trouble-starting strategy for living I've heard yet.

The free market is brutal, sir. And the difference between us quickly becomes whether or not we're willing to accept the consequences of our own actions and applying that standard consistently to politicians, corporations and individuals alike, or not.

And don't inject "perfection" into anything I've said yet. It doesn't belong there.

[Guest]

Accepting today's reality after all the power grabs are made, pragmatically accepting whatever works after whatever smoke and fires are started, is the most docile and trouble-starting strategy for living I've heard yet.

The free market is brutal, sir. And the difference between us quickly becomes whether or not we're willing to accept the consequences of our own actions and applying that standard consistently to politicians, corporations and individuals alike, or not.

And don't inject "perfection" into anything I've said yet. It doesn't belong there.

No - the difference between you and me is you believe that a few catchy formulas can solve all the worlds problems without actually having to address each issue on its own terms.

My pragmatic approach allows the best solution to be applied to each and every issue as it arises - without having to attempt to shoe horn it into a neat little predigested box.

My approach is the very essence of hard work - where as yours is just lazy intellectualism.

Br Cornelius

[Yamato]

No - the difference between you and me is you believe that a few catchy formulas can solve all the worlds problems without actually having to address each issue on its own terms.

My pragmatic approach allows the best solution to be applied to each and every issue as it arises - without having to attempt to shoe horn it into a neat little predigested box.

My approach is the very essence of hard work - where as yours is just lazy intellectualism.

Br Cornelius

I'm holding my own nation's government to standards that the market imposes on me because I'm not too big to fail. You're once again disingenuously putting words in my mouth to distort what I'm saying.

You don't allow the best solution when government forces its own solutions upon everyone. To even believe what you're saying you have to assume that government always has the best solution to all of our problems. That "herd mentality" that you assign to free people making purchasing decisions for themselves. I'd love to see you pat your wife or your girlfriend on the head and tell them that actually they're just following a herd and aren't as capable of making smart purchasing decisions for themselves and should let the government take care of them.