226 replies to this topic

[Gummug]

questionmark, on 30 September 2012 - 07:59 PM, said:

The government can delegate any of its tasks to whomever it wants. There is nothing unconstitutional about that.

I wish it would delegate its power back to the people then.

[ninjadude]

Gummug, on 30 September 2012 - 08:19 PM, said:

I wish it would delegate its power back to the people then.

That would result in chaos as "the people" cannot collectively govern.

[DieChecker]

questionmark, on 30 September 2012 - 08:24 AM, said:

Now, given that all the gold in the world is about 5.3 billion troy ounces worth about 7 trillion dollars and we have about 7 billion people people on earth, can you vision a economy where everybody has just $1,000,000 in total liquifiable assets?

Nope. But isn't my post suggesting that might not be necessary? It could work without a giant stockpile.

But, I tend to agree with those saying it is impractical. I don't like the idea of using gold at all, but I'm just saying I can see ways it could be implemented if done smartly. At least on a US national scale.

[questionmark]

DieChecker, on 01 October 2012 - 05:05 AM, said:

Nope. But isn't my post suggesting that might not be necessary? It could work without a giant stockpile.

But, I tend to agree with those saying it is impractical. I don't like the idea of using gold at all, but I'm just saying I can see ways it could be implemented if done smartly. At least on a US national scale.

If you want to set money to a standard the only possibility is to use something that grows or shrinks dynamically adapting  the value of money in circulation. Something like capping the circulation according to the GDP would work. Or capping it to the national productivity. Just arbitrarily using a stockpile of something has proven to cause more problems than it solves.

But I can understand that some companies want to push the metal they mine as "money". They just don't have thought it through: If what they mine is money, with what would they get paid? Or are we just going to switch banker for gold miners to sit on the money bin?

For that to work we would have to go back to the old system when actual gold and silver was used as payment: All gold and silver belonged to the state and those exploiting it were paid fractionally for their effort (if at all).

[Yamato]

DieChecker, on 29 September 2012 - 06:54 AM, said:

I think the problem is that the economy started growing many, many multiples of what the gold standard could back. That is, without devaluing the gold itself. And thus creating inflation. So growth would have to be Limited somehow, and so I ask you if that is the American Way... to limit growth just because we don't have enough gold? The proposal fixes one thing and creates a half dozen more of the same caliber.

Also it is naive to believe that the rest of the world still working on the fiat system will just let the US go on its economic way. The world economy would flounder and everyone would be pulled down. Ruinous.


They could devalue Everything, but I don't think anyone has the Brass to do that. Or they could set the currency to something else, like diamonds.

Because really, even if they had enough gold, and I went in and asked for $1 in gold, what would I get? A tiny little mote of dust. The average man still could not redeam his savings for a reasonable amount of gold. A months wages would be a tiny little dime size coin.

And, as was said, there is not enough gold. So gold would have to be revalued at 10 or 20 times as much. Such that a years wages would equal that one tiny coin. That should make all those Gold Standard people feel better.

Not to mention that everyone out there with gold in their closets would now be super rich. The Rich get richer again??

Growth should be limited by the market.  That is the American way.   Not inflated by the government.  Deflation is something Bernanke can't stand and something the market gladly accepts daily.

The amount of gold doesn't matter.   The amount of gold wasn't an issue in 1970 and it wouldn't be an issue now.   There might be runs on the bank for cash the way we're stacked now but there aren't going to be runs on the bank for gold unless you're anticipating a currency crisis after the gold standard rather than before.  Looking at all of US history I'm not sure how someone can think rock solid value for 100 years under the gold standard is a currency crisis while ignoring <100% devaluation <100 years.  If a gold standard is adopted and eventually there "isn't enough gold" it's going to drive gold prices higher.  Higher gold prices is inflationary without a gold standard and deflationary with one.  More affordable housing, insurance, health care, college tuition, gasoline, electricity, food etc. doesn't scare me.

Without just making statements about what's naive, you should explain how you figure the world would flounder and become ruinous just because the US (as opposed to China, India, Europe or someone else) decided to base its currency on gold and silver like it's done in the past.   Countries can simply peg to the dollar, adopt a gold standard themselves, or if they believe deflating their currency is good for their own economies (e.g. Switzerland) or simply do nothing at all (until they decide to).

If $1 of gold is impossible to get, so what?  If that's what the problem is with the idea then it's an awesome idea.

Supporting the status quo without offering any alternatives ultimately isn't saying much.   Banks don't have the cash to liquidate their balance sheets, to meet the digital values that are printed on their customers bank statements, they turn what you deposit  into 10x the original amount, and nobody suggests making one dollar bills worth $10 to compensate for that practice, much less marching in the street protesting for the end of fractional reserve banking.   Changing the rules on a metals backed currency when determining valuations is completely unnecessary.

The explosion of growth in the past 30 years has occurred due to the explosion of credit.   Debt as money has its limitations and when we take a look at current events, we should start to be able to identify those limits.   I'm all for the free market setting interest rates and giving loans to responsible lenders.  I'm not interested in the insanity in going from $1 trillion in credit in 1980 to $50 trillion in credit today over a single generation of Americans.   Just how entitled do these boomers think they are?   What's ruinous is putting our children in chains to pay back all our credit card bills, because it's clear there isn't a wick's worth of willpower in Washington to pay the debt off.

[Gummug]

ninjadude, on 01 October 2012 - 01:13 AM, said:

That would result in chaos as "the people" cannot collectively govern.

What I mean is, the government should be responsive to the popular will, the will of the people, as it was in George Washington's day. Or would you say that didn't work out so well?

[Yamato]

3-month (3rd quarter 2012) relative performance chart of commodities, currencies, and equities:

[Br Cornelius]

Yamato, on 01 October 2012 - 08:46 PM, said:

Growth should be limited by the market.  That is the American way.   Not inflated by the government.  Deflation is something Bernanke can't stand and something the market gladly accepts daily.

The amount of gold doesn't matter.   The amount of gold wasn't an issue in 1970 and it wouldn't be an issue now.   There might be runs on the bank for cash the way we're stacked now but there aren't going to be runs on the bank for gold unless you're anticipating a currency crisis after the gold standard rather than before.  Looking at all of US history I'm not sure how someone can think rock solid value for 100 years under the gold standard is a currency crisis while ignoring <100% devaluation <100 years.  If a gold standard is adopted and eventually there "isn't enough gold" it's going to drive gold prices higher.  Higher gold prices is inflationary without a gold standard and deflationary with one.  More affordable housing, insurance, health care, college tuition, gasoline, electricity, food etc. doesn't scare me.

Without just making statements about what's naive, you should explain how you figure the world would flounder and become ruinous just because the US (as opposed to China, India, Europe or someone else) decided to base its currency on gold and silver like it's done in the past.   Countries can simply peg to the dollar, adopt a gold standard themselves, or if they believe deflating their currency is good for their own economies (e.g. Switzerland) or simply do nothing at all (until they decide to).

If $1 of gold is impossible to get, so what?  If that's what the problem is with the idea then it's an awesome idea.

Supporting the status quo without offering any alternatives ultimately isn't saying much.   Banks don't have the cash to liquidate their balance sheets, to meet the digital values that are printed on their customers bank statements, they turn what you deposit  into 10x the original amount, and nobody suggests making one dollar bills worth $10 to compensate for that practice, much less marching in the street protesting for the end of fractional reserve banking.   Changing the rules on a metals backed currency when determining valuations is completely unnecessary.

The explosion of growth in the past 30 years has occurred due to the explosion of credit.   Debt as money has its limitations and when we take a look at current events, we should start to be able to identify those limits.   I'm all for the free market setting interest rates and giving loans to responsible lenders.  I'm not interested in the insanity in going from $1 trillion in credit in 1980 to $50 trillion in credit today over a single generation of Americans.   Just how entitled do these boomers think they are?   What's ruinous is putting our children in chains to pay back all our credit card bills, because it's clear there isn't a wick's worth of willpower in Washington to pay the debt off.

The Great Depression in America involved a run on the banks - and America was on the Gold standard at the time.
I am certain there are multiple other examples of runs on currencies on the Gold standard - do you want me to find them or will you simply accept that your claim that a Gold standard is universally stable is simply an article of faith on your part.

Br Cornelius

[Yamato]

Br Cornelius, on 01 October 2012 - 08:54 PM, said:

The Great Depression in America involved a run on the banks - and America was on the Gold standard at the time.
I am certain there are multiple other examples of runs on currencies on the Gold standard - do you want me to find them or will you simply accept that your claim that a Gold standard is universally stable is simply an article of faith on your part.

Br Cornelius

Runs on the banks were a result of the Great Depression, not the cause of it.   Dollar stability is an historical fact, 97-years long under the gold standard.   Crashes happen when values get carried away and are far greater than what the market would have them be.  So long as you keep defending the bank robbers you won't be able to accept the tough medicine to rein the pie in the sky prices in.   American expectations of endless growth are foolish.    Government mismanagement caused the Great Depression just like it's causing the next one a few of us can't see coming.

[Br Cornelius]

Yamato, on 01 October 2012 - 09:07 PM, said:

Runs on the banks were a result of the Great Depression, not the cause of it.   Dollar stability is an historical fact, 97-years long under the gold standard.   Crashes happen when values get carried away and are far greater than what the market would have them be.  So long as you keep defending the bank robbers you won't be able to accept the tough medicine to rein the pie in the sky prices in.   American expectations of endless growth are foolish. Government mismanagement caused the Great Depression just like it's causing the next one a few of us can't see coming.

I have never defended the bankers - not once. I have never defended the Fiat currency system or the FED. Is that clear NEVER !!!
If you cannot see that that doesn't mean that I have to adopt a one size fits all solution then you are not really open to reason.
The Great Depression was caused by a contraction of the money supply because the American Government didn't have enough Gold to meet its debt obligations. It happened under a Gold Standard and was caused, in part, by the Gold standard. There have been many other runs on the Gold standard currencies for exactly the same reasons as the American run on the bank.
The intrinsic stability of the Gold Standard is a figment of your imagination.

Br Cornelius

[Yamato]

questionmark, on 01 October 2012 - 03:38 PM, said:

If you want to set money to a standard the only possibility is to use something that grows or shrinks dynamically adapting  the value of money in circulation. Something like capping the circulation according to the GDP would work. Or capping it to the national productivity. Just arbitrarily using a stockpile of something has proven to cause more problems than it solves.

But I can understand that some companies want to push the metal they mine as "money". They just don't have thought it through: If what they mine is money, with what would they get paid? Or are we just going to switch banker for gold miners to sit on the money bin?

For that to work we would have to go back to the old system when actual gold and silver was used as payment: All gold and silver belonged to the state and those exploiting it were paid fractionally for their effort (if at all).

And debtors want central banks to push the paper they print as "money" but it has no real value but for the real value already out on the market.  It's just a number on a digital screen.  And every use for that funny money that has real value is going to find a place for all that cheap easy money once its deployed there.    The banks are buying commodities.  You should be pounding the lectern about that fact but instead you ridicule the individuals when they do it?   There shouldn't be this flood of paper inflating these commodities in the first place.   If I had it my way prices on all of these important assets would collapse to levels the market deems acceptable.

You both demand this price inflation and act like you can't see it at the same time.  Something clearly isn't honest about that.

[Yamato]

Br Cornelius, on 01 October 2012 - 09:19 PM, said:

I have never defended the bankers - not once. I have never defended the Fiat currency system or the FED. Is that clear NEVER !!!
If you cannot see that that doesn't mean that I have to adopt a one size fits all solution then you are not really open to reason.
The Great Depression was caused by a contraction of the money supply because the American Government didn't have enough Gold to meet its debt obligations. It happened under a Gold Standard and was caused, in part, by the Gold standard. There have been many other runs on the Gold standard currencies for exactly the same reasons as the American run on the bank.
The intrinsic stability of the Gold Standard is a figment of your imagination.

Br Cornelius

I'm still waiting on the better alternative.  It isn't food and it isn't work, as we've already discussed.  Debt obligations are caused by spending, not gold standards.  You can't have rampant spending with a gold standard, that's why we want one!

[Br Cornelius]

Yamato, on 01 October 2012 - 09:22 PM, said:

And debtors want central banks to push the paper they print as "money" but it has no real value but for the real value already out on the market.  It's just a number on a digital screen.  And every use for that funny money that has real value is going to find a place for all that cheap easy money once its deployed there. The banks are buying commodities.  You should be pounding the lectern about that fact but instead you ridicule the individuals when they do it?   There shouldn't be this flood of paper inflating these commodities in the first place.   If I had it my way prices on all of these important assets would collapse to levels the market deems acceptable.

You both demand this price inflation and act like you can't see it at the same time.  Something clearly isn't honest about that.

I have made suggestions about tying currency to things of real value - you simply want to tie it to a shiny thing.

There are more than two alternatives !!!

Br Cornelius

[Br Cornelius]

Yamato, on 01 October 2012 - 09:25 PM, said:

I'm still waiting on the better alternative.  It isn't food and it isn't work, as we've already discussed.  Debt obligations are caused by spending, not gold standards.  You can't have rampant spending with a gold standard, that's why we want one!

Rampant inflation is caused by printing to much money - the simple solution is to prevent that from happening by setting the rules.
All systems (including Gold) are subject to instability and abuse - if you fail to regulate them properly.

Br Cornelius

[Br Cornelius]

Yamato, on 01 October 2012 - 09:25 PM, said:

I'm still waiting on the better alternative.  It isn't food and it isn't work, as we've already discussed.  Debt obligations are caused by spending, not gold standards.  You can't have rampant spending with a gold standard, that's why we want one!

Multiple people have made real suggestions of alternatives - you simply wont accept that they are real alternatives.

Br Cornelius