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The US Dollar vs. The Gold Standard

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#91    Br Cornelius

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Posted 03 October 2012 - 08:38 AM

View PostYamato, on 03 October 2012 - 06:53 AM, said:

Why???

Interesting that Br likes your post when he's the one advocating a barter-based Bancor.   Even more interesting that he likes your post claiming a fiat driven world has an advantage after claiming he understands the problems with fiat currency.   I see someone slopping whatever criticism he can find on the wall with no real conviction to saying anything (just poo poo gold and he's good).
I didn't agree with all the sentiments. The principle a of a paper based money system is not intrinsically flawed - just the version we operate at the moment. I have expressed my prefered option for a paper based money tied to a basket of real commodity values.

I do not fundamentally disagree with you objections to the current money system - but do not agree with your solution. As such you can see that you do not have to agree with everything someone says all of the time :tu: Its not been wishy washy or lacking in understanding - its called nuance.

Br Cornelius

Edited by Br Cornelius, 03 October 2012 - 08:40 AM.

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#92    sam12six

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Posted 03 October 2012 - 09:07 AM

I'll second what Cornelius said.

I've said in a couple of posts in this thread that gaining control of the economy means killing the Fed (or whatever the Central Bank is called in the country in question).

The problem I have is (the double standard you keep trying to point out) isn't solely with gold. It's just that the title of this thread is dollar versus gold standard, so that's the aspect I've focused on. Pre electronics, gold had very little practical value. Anything you could use it for, other metals would serve better.

You're right that most things have a value only because we perceive them to have value. I'm saying the perceived value of gold came about only because governments so widely chose that as the medium for money.

I'd love to see an end to central banks and governments control their own money. I'd also love to see that money tied to the value of real commodities. I just reject the idea of the value being tied to any single commodity whether that's gold, pork bellies, or tulip bulbs. The stability of gold value is more open to fluctuation than those who blindly espouse the gold standard want to believe. In large part, that's because there's never been a global economy with our speed of transaction where economies using fiat currency competed against those using money with intrinsic value. The flexibility of a fiat system would be a huge advantage in such a competition.

Anyway, I think we're on the same page about what's wrong. I just think the gold standard is an over-simplified solution that can neither be put in place nor perform competitively in today's world.


#93    Yamato

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Posted 03 October 2012 - 11:37 AM

View PostBr Cornelius, on 03 October 2012 - 08:38 AM, said:

I didn't agree with all the sentiments. The principle a of a paper based money system is not intrinsically flawed - just the version we operate at the moment. I have expressed my prefered option for a paper based money tied to a basket of real commodity values.

I do not fundamentally disagree with you objections to the current money system - but do not agree with your solution. As such you can see that you do not have to agree with everything someone says all of the time :tu: Its not been wishy washy or lacking in understanding - its called nuance.

Br Cornelius
That's interesting, I hope you can elaborate on what sentiments you didn't agree with and why.    When I remember the reasons you cited that a gold-based money system is "intrinsically flawed" how can you now say that a paper-based money system isn't?   What utility is paper?  What intrinsic value is paper?   Can I write on it or something?   Can I wipe something with it?

To be frank, you've evolved from the beginning of the discussion to land on this basket of commodities based money   I want paper backed by commodities too, and I put my money where my mouth is as far as that goes.   The reason you can't agree with a gold standard per-se is because you introduce all kinds of unique and bizarre practices for how you imagine a gold standard must work and at the same time, you haven't identified one flaw with gold that doesn't exist with other commodities.   I have to throw out history to entertain your conjecture about what will happen and I'm not able to do that.    If your only point is to support a modified gold standard but with a broader diversification of other commodities (for an alleged greater stability) I've already agreed with taking some initiative on that and I've already mentioned more than once how I favor commodities-based currencies already out there, so it seems to me we actually do agree on the solution but nuance got in the way of that as well.  

Some things aren't nuance however, like when you claim that the encyclopedia is wrong and I ask you to back up your assertion and you ignore me.

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#94    Yamato

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Posted 03 October 2012 - 11:54 AM

View Postsam12six, on 03 October 2012 - 09:07 AM, said:

I'll second what Cornelius said.

I've said in a couple of posts in this thread that gaining control of the economy means killing the Fed (or whatever the Central Bank is called in the country in question).

The problem I have is (the double standard you keep trying to point out) isn't solely with gold. It's just that the title of this thread is dollar versus gold standard, so that's the aspect I've focused on. Pre electronics, gold had very little practical value. Anything you could use it for, other metals would serve better.

You're right that most things have a value only because we perceive them to have value. I'm saying the perceived value of gold came about only because governments so widely chose that as the medium for money.

I'd love to see an end to central banks and governments control their own money. I'd also love to see that money tied to the value of real commodities. I just reject the idea of the value being tied to any single commodity whether that's gold, pork bellies, or tulip bulbs. The stability of gold value is more open to fluctuation than those who blindly espouse the gold standard want to believe. In large part, that's because there's never been a global economy with our speed of transaction where economies using fiat currency competed against those using money with intrinsic value. The flexibility of a fiat system would be a huge advantage in such a competition.

Anyway, I think we're on the same page about what's wrong. I just think the gold standard is an over-simplified solution that can neither be put in place nor perform competitively in today's world.
The title is comparing the historical gold standard to the quantitative easing fiat dollar we have today.   And the contest is no contest.  But you weren't discussing the title or taking exception to it, you were replying to a comment I made that Dwight Eisenhower and John F Kennedy didn't call the gold miners before their appointed Fed Chairman inflated the money supply, thereby demonstrating that we aren't going to be the slaves of the evil gold miners that Br claimed we would.   I think you probably agree with me on this as well or at least I hope you do.   If you can't advocate for the gold standard over today's fiat because you're convinced that it's unstable, I don't know what you're basing that belief on.   Throwing out all US history would seem to be prerequisite though.

One commodity not enough?   Tie it to gold, silver, platinum, palladium, bronze, brass, copper and aluminum then.   Pork bellies and tulip bulbs are foolish ideas because you cannot keep these things.  They do not store.  You cannot save them.  Money must be capable of being saved, among other things.

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#95    sam12six

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Posted 03 October 2012 - 12:07 PM

View PostYamato, on 03 October 2012 - 11:54 AM, said:

The title is comparing the historical gold standard to the quantitative easing fiat dollar we have today.   And the contest is no contest.  But you weren't discussing the title or taking exception to it, you were replying to a comment I made that Dwight Eisenhower and John F Kennedy didn't call the gold miners before their appointed Fed Chairman inflated the money supply, thereby demonstrating that we aren't going to be the slaves of the evil gold miners that Br claimed we would.   I think you probably agree with me on this as well or at least I hope you do.   If you can't advocate for the gold standard over today's fiat because you're convinced that it's unstable, I don't know what you're basing that belief on.   Throwing out all US history would seem to be prerequisite though.

The problem with comparing historical performance with future performance is that the world changes. If you were arguing that to make our army more effective all we need is more horses, should we agree because horses have made armies more effective throughout history?

I definitely agree that we wouldn't be slaves to gold miners. If we were going to be slaves, it might be to those who own gold mines. What I think would happen in reality is that those in control of our economy now would simply concentrate on controlling the world's gold supply.


View PostYamato, on 03 October 2012 - 11:54 AM, said:

One commodity not enough?   Tie it to gold, silver, platinum, palladium, bronze, brass, copper and aluminum then.   Pork bellies and tulip bulbs are foolish ideas because you cannot keep these things.  They do not store.  You cannot save them.  Money must be capable of being saved, among other things.

I think this might be the base of why we seem to disagree even though what we're saying is not very far apart. You're wrong. Money does not need to be kept indefinitely because money isn't supposed to have value of its own. Money is supposed to REPRESENT value. Again, gold became a valuable thing because most of the powerful governments in history chose this mostly useless metal as their medium for money. With that historical perception plus actual uses the modern world has developed for the material, it has actual value far beyond its use to represent value.

If the decision were mine, I'd tie the dollar's value to a formula that included every category of commodities traded on the open market in the United States. Some commodities will rise while others will fall, but the more that are considered, the better the whole thing represents the health of the country's economy.


#96    Br Cornelius

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Posted 03 October 2012 - 04:56 PM

View PostYamato, on 03 October 2012 - 11:37 AM, said:

That's interesting, I hope you can elaborate on what sentiments you didn't agree with and why. When I remember the reasons you cited that a gold-based money system is "intrinsically flawed" how can you now say that a paper-based money system isn't?   What utility is paper?  What intrinsic value is paper?   Can I write on it or something?   Can I wipe something with it?

To be frank, you've evolved from the beginning of the discussion to land on this basket of commodities based money   I want paper backed by commodities too, and I put my money where my mouth is as far as that goes.   The reason you can't agree with a gold standard per-se is because you introduce all kinds of unique and bizarre practices for how you imagine a gold standard must work and at the same time, you haven't identified one flaw with gold that doesn't exist with other commodities.   I have to throw out history to entertain your conjecture about what will happen and I'm not able to do that. If your only point is to support a modified gold standard but with a broader diversification of other commodities (for an alleged greater stability) I've already agreed with taking some initiative on that and I've already mentioned more than once how I favor commodities-based currencies already out there, so it seems to me we actually do agree on the solution but nuance got in the way of that as well.  

Some things aren't nuance however, like when you claim that the encyclopedia is wrong and I ask you to back up your assertion and you ignore me.
Any statement I have made concerning a Gold standard is based on the historic operation of the Gold standard - and they are all valid critiques, not bizarre.
A Gold standard has never operated in a computer driven age so there are a whole new set of issues which operating a Gold standard will have to face. How will transnational accounts be settled in a world of seconds only trades which can see billions flow between currencies on an hourly basis. It certainly not obvious how that little issue would be addressed in a traditional hard Gold currency situation.
The actual concept of real gold been used to settle accounts is the bizarre element at this stage in history. The elegance of a basket of commodities is that the currency is not dictated by the amount of each commodity which any given country holds - it is the perfect abstract yardstick which the world needs. If a state decides to print excess notes then its relative value on the world currency market would automatically fall and hence its purchase power - but accounts would not be deflated since they are held in the intermediary currency. Finally a system which discourages countries from running up debts and then trying to devalue their way out of them.

I don't think you have ever thought beyond the issue that the current system is flawed and Gold once worked better. That really won't cut it as the basis of a modern monetary system of the computer age. Ultimately my position is that I am content to read a range of informed academic opinion on the subject of and then draw my conclusions based on what seems the best option. I will not be basing my opinion on the positions of posters here, though if they point me towards good source material I will hopefully learn from it. So far all you have provided is your own opinion and that is probably why I remain unconvinced.

Br Cornelius

Edited by Br Cornelius, 03 October 2012 - 05:29 PM.

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#97    Yamato

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Posted 04 October 2012 - 04:56 AM

View Postsam12six, on 03 October 2012 - 12:07 PM, said:

The problem with comparing historical performance with future performance is that the world changes. If you were arguing that to make our army more effective all we need is more horses, should we agree because horses have made armies more effective throughout history?

I definitely agree that we wouldn't be slaves to gold miners. If we were going to be slaves, it might be to those who own gold mines. What I think would happen in reality is that those in control of our economy now would simply concentrate on controlling the world's gold supply.




I think this might be the base of why we seem to disagree even though what we're saying is not very far apart. You're wrong. Money does not need to be kept indefinitely because money isn't supposed to have value of its own. Money is supposed to REPRESENT value. Again, gold became a valuable thing because most of the powerful governments in history chose this mostly useless metal as their medium for money. With that historical perception plus actual uses the modern world has developed for the material, it has actual value far beyond its use to represent value.

If the decision were mine, I'd tie the dollar's value to a formula that included every category of commodities traded on the open market in the United States. Some commodities will rise while others will fall, but the more that are considered, the better the whole thing represents the health of the country's economy.
If you ignore history you're bound to repeat it.   One Continental was enough for me.  I'm trying to save the dollar not collect inventories of defenseless rhetorical statements about a theoretical future blind of history where the dollar doesn't even exist anymore and then tell the other guy that he's the one threatening the economy.

Money must be capable of being saved because it's supposed to represent value.   There is no value in tulip bulbs and pork bellies because they're on fast tracks to zero, and far faster tracks to zero than the fiat currency you agree is a problem.  You cannot maintain a steady dollar represented by commodities whose value is only propped up by the promise of continued production due to the fact that they're perishable and subject to absolute price deterioration when they spoil.   You would subject the value of our money to every commodities-based calamity we could conceive of and that's why the diversification that sounds good in theory will never work better than hard assets that have proven historical value.

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#98    DieChecker

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Posted 04 October 2012 - 05:25 AM

I also don't like the idea of linking the value of the Dollar to something that is as ephemeral as food or household purchases. I think it should be linked to stuff that would count as collateral to the banking system. Property, raw resources, vehicles, artworks (?). Stuff that is not going anywhere.

I can see the linking it to GDP and such, but that seems a different linking/thinking then it would be if you're linking it to actual goods and services.

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#99    Yamato

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Posted 04 October 2012 - 05:46 AM

View PostBr Cornelius, on 03 October 2012 - 04:56 PM, said:

Any statement I have made concerning a Gold standard is based on the historic operation of the Gold standard - and they are all valid critiques, not bizarre.
A Gold standard has never operated in a computer driven age so there are a whole new set of issues which operating a Gold standard will have to face. How will transnational accounts be settled in a world of seconds only trades which can see billions flow between currencies on an hourly basis. It certainly not obvious how that little issue would be addressed in a traditional hard Gold currency situation.
The actual concept of real gold been used to settle accounts is the bizarre element at this stage in history. The elegance of a basket of commodities is that the currency is not dictated by the amount of each commodity which any given country holds - it is the perfect abstract yardstick which the world needs. If a state decides to print excess notes then its relative value on the world currency market would automatically fall and hence its purchase power - but accounts would not be deflated since they are held in the intermediary currency. Finally a system which discourages countries from running up debts and then trying to devalue their way out of them.

I don't think you have ever thought beyond the issue that the current system is flawed and Gold once worked better. That really won't cut it as the basis of a modern monetary system of the computer age. Ultimately my position is that I am content to read a range of informed academic opinion on the subject of and then draw my conclusions based on what seems the best option. I will not be basing my opinion on the positions of posters here, though if they point me towards good source material I will hopefully learn from it. So far all you have provided is your own opinion and that is probably why I remain unconvinced.

Br Cornelius
No, your statements about the gold standard are NOT based on history; they ignore history.

I've provided the video here giving you the historical facts, which you haven't acknowledged.  You make statements that you oppose fiat currency.  At this point I have to wonder why.   You just deny the history or make empty assertions that what worked historically can't work now.  I've provided links here you've completely ignored.  I've challenged you repeatedly to back up your claim that the encyclopedia is wrong and you act like you can't hear me.  Listen Br, I'm the kind of guy who doesn't stop asking you to do that, so as long as you're here, that's how long your claims will go undefended.   You're not deaf, Br.   Either pony up how Wiki is wrong after I ask you three times, or own up to the credibility loss for claiming that it is.

I've provided charts proving to you that what you thought is your own novel idea already exists in the world.  You've completely ignored those too, or the fact that export-rich countries like Australia are heavily weighted in metals.  You have provided no real world history behind any of your claims and so while they sound appealing to me rhetorically I have to reject them on a total lack of evidence.  The reason you say I haven't convinced you is the reason you haven't convinced me.   My position isn't based on blind faith.  It's based on fact.   I don't share in your rhetoric-based faith and I don't understand what your real agenda is here to ignore 234 years of US history.   There is no precedent of dollar instability you can cite nor reason provided for me to believe the increasingly random statements you keep collecting here.

Now "the computer driven age" is the next excuse we're squirreling into.   This is exactly what I mean about someone throwing all the crap they can find on the wall and hoping something sticks.  If you had remained constant about the problem with the gold standard from the beginning, instead of exploring every theoretical problem with it you can come up with, I would at least be able to take your militant opposition seriously.   I would at least be able to trust that you genuinely believe in the problem that you have but you're all over the road Br.  You're just collecting every rhetorical problem imaginable and dumping them onto my thread without backing them up.  

Is there a problem with the gold standard you don't have?   I have to wonder.

"That really won't cut it as the basis of a modern monetary system of the computer age."

HOW NOT?

Again, you offer no explanations for how or why you make the statements you do.   What does this latest reason you've escaped into have to do with a stable currency?   Here again you're just making statements.  I can just make statements too but I think I'm the one on solid ground here because I've backed up every assertion I've made with facts, charts, history, common sense, and examples for money that one can actually SAVE, thus have the ability to return us to a capital-based economy where credit is based on savings and not nominal digital values printed on a printing press or typed onto a digital balance sheet with a magical keyboard.  We have enough computer-driven monopoly money with no value to speak of except for the value of everything out there it borrows itself from.   That is the one thing discussed here so far that truly has no value in and of itself.   The other alternatives discussed already are better.  I'm not so intractable about this issue that I can't even admit that much.   But on the contrary, computers are a good reason why a stable currency is more important now than ever because they don't even have to print the money they create anymore.   I shouldn't have to explain the problems with monetary policy the modern world has created if you're genuinely opposed to the fiat system.

Again, I agree with someone out there in this great big world taking the initiative and implementing a commodities-based currency (apparently above and beyond the commodities-based currencies already out there?) whether it's China, India, Japan, the US, Europe, or anyone else with an economy of scale on the global marketplace who decides to do this.  I see you've refined your idea from previous posts to at least include commodities that the US produces in a US commodities-based currency.  If that's the entirety of the changes we make to our currency, I won't have to sell US dollars, Euros and Pounds to buy Australian and Canadian dollars and Renminbi anymore and we'll have a solution that I think and genuinely hope we can both agree on.  I hope you can finally acknowledge the agreement here instead of belittling me to prop up new rhetorical problems that are somehow unique to gold in every new reply.

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#100    Yamato

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Posted 04 October 2012 - 06:01 AM

I should also add, the nuanced agreement we've all hopefully reached here is only going to be effective if we combine it to the other half of the solution that we should all be able to agree on here;  Ending the Federal Reserve system.   Sam12six is at least on board, and that's really the elephant in the room nobody's paying enough attention to.   Replacing the Fed with open float on the world market and letting the dollar value itself on macro economic merits is good enough for me without giving the federal government even more incentive to manipulate industries it has no business being in already.   We've had enough military waste.  We've had enough agricultural waste.  We've had enough loss of life, limb and treasure.  Price fixing gurus from Washington will be the death of us all if this madness continues.

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#101    sam12six

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Posted 04 October 2012 - 08:10 AM

View PostYamato, on 04 October 2012 - 06:01 AM, said:

I should also add, the nuanced agreement we've all hopefully reached here is only going to be effective if we combine it to the other half of the solution that we should all be able to agree on here;  Ending the Federal Reserve system.   Sam12six is at least on board, and that's really the elephant in the room nobody's paying enough attention to.   Replacing the Fed with open float on the world market and letting the dollar value itself on macro economic merits is good enough for me without giving the federal government even more incentive to manipulate industries it has no business being in already.   We've had enough military waste.  We've had enough agricultural waste.  We've had enough loss of life, limb and treasure.  Price fixing gurus from Washington will be the death of us all if this madness continues.

I'm more than on board with the concept of killing the bank. As I mentioned before, I believe the only real difference in our stances is that your statements and loyalty to the gold standard don't match the definition of money that you've accepted on the surface as something that represents value.

I'll try to make more clearly the distinction I think is separating us:

You seem to believe money should have substantial intrinsic value, not represent it. If that's the case, it's a commodity of its own subject to price fluctuations like any other commodity. While it seems a subtle distinction as a semantic argument, it's a fundamental difference in world view. Money itself is supposed to be as worthless as possible while also being as durable as possible and as difficult for the average person to duplicate as possible. The value of it is what it represents (a backing by the government in today's world), not what it's made of.

As far as whether valuation should be tied to GDP, a broad spectrum of commodities, or only nonperishable commodities, it's really a different discussion, but I personally believe GDP is composed of too much "imaginary" money to use it. Only nonperishable commodities do not reflect the value of our country's agricultural productivity. Yes, a wide-scale disaster could drastically lower (or increase) the value of the currency tied to it, but doesn't that make sense? We would have just lost a monster amount of our country's economic strength. Shouldn't such a huge loss be reflected somehow by the currency of the country?

Lastly, being doomed to history repeating itself is a matter of human nature. It means when a country that is taking similar steps to other countries that have encountered disaster down that path, we should correct our course. This is wise. It does not mean we should do something because it has been effective for most of history while ignoring the changing world. That's just being closed minded. Horses no longer turn a bunch of guys walking around into an unstoppable army. Pillaging a neighboring community is no longer the accepted way to simultaneously stimulate the economy and control the population. Making money out of a material that has a value inflated by a combination of fear, nostalgia, and industrial usefulness is not a wise choice.

The stability and value of a currency (as money) is based solely on its supply. This applies to wampum as much as it does to gold coins. Straightening out our currency issues is almost completely dependent on eliminating central banks. It's also almost completely impossible in today's political world.


#102    Yamato

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Posted 04 October 2012 - 10:01 AM

View Postsam12six, on 04 October 2012 - 08:10 AM, said:

I'm more than on board with the concept of killing the bank. As I mentioned before, I believe the only real difference in our stances is that your statements and loyalty to the gold standard don't match the definition of money that you've accepted on the surface as something that represents value.

I'll try to make more clearly the distinction I think is separating us:

You seem to believe money should have substantial intrinsic value, not represent it. If that's the case, it's a commodity of its own subject to price fluctuations like any other commodity. While it seems a subtle distinction as a semantic argument, it's a fundamental difference in world view. Money itself is supposed to be as worthless as possible while also being as durable as possible and as difficult for the average person to duplicate as possible. The value of it is what it represents (a backing by the government in today's world), not what it's made of.

As far as whether valuation should be tied to GDP, a broad spectrum of commodities, or only nonperishable commodities, it's really a different discussion, but I personally believe GDP is composed of too much "imaginary" money to use it. Only nonperishable commodities do not reflect the value of our country's agricultural productivity. Yes, a wide-scale disaster could drastically lower (or increase) the value of the currency tied to it, but doesn't that make sense? We would have just lost a monster amount of our country's economic strength. Shouldn't such a huge loss be reflected somehow by the currency of the country?

Lastly, being doomed to history repeating itself is a matter of human nature. It means when a country that is taking similar steps to other countries that have encountered disaster down that path, we should correct our course. This is wise. It does not mean we should do something because it has been effective for most of history while ignoring the changing world. That's just being closed minded. Horses no longer turn a bunch of guys walking around into an unstoppable army. Pillaging a neighboring community is no longer the accepted way to simultaneously stimulate the economy and control the population. Making money out of a material that has a value inflated by a combination of fear, nostalgia, and industrial usefulness is not a wise choice.

The stability and value of a currency (as money) is based solely on its supply. This applies to wampum as much as it does to gold coins. Straightening out our currency issues is almost completely dependent on eliminating central banks. It's also almost completely impossible in today's political world.

is that your statements and loyalty to the gold standard don't match the definition of money that you've accepted on the surface as something that represents value.

HOW NOT?   I've got over 6000 years proving you wrong.   Find me another form of money from 6000 years ago still in circulation today.  Good luck.

Gold isn't any more outdated than paper, or grain, or work, or pork.  So the continuous references to irrelevant examples of obsolescence having nothing to do with this subject aren't making much of a point here.  Unless you think that something like oil, which didn't exist until long after man domesticated fighting horses, makes a better basis for money.  

If you don't have something of historical value to base your money on, it is as good as worthless eventually.  All history proves this is true, and based on current trends, there's no reason I can see to believe that imminent fact has changed because of strange references to horses in the army, evil gold miners, US hegemony, or a computer driven society (am I leaving anything out?).   If you don't know you can get a fixed amount of something for the currency you've got, you won't get it eventually because the increases in money supply the gurus can't stop selling us on will not cease.  There's nothing under it to hold it up.  There is a lack of substantial intrinsic value.  That's the problem we must overcome here.  We thought there was fiat holding ours up but unfortunately 99 years of US history have proven that belief false and if you can acknowledge the video presented here for discussion, you should be able to concede to that too.

Let's examine your three criteria for money:
1) That it's as durable as possible.   Is paper as durable as possible?  Then why does the papered-over world not agree with you?   And I already see you're against valuable coins.  That fits into the Fed's MO who quickly had to stop making valuable coins when it realized that it was printing the value right out of the money it was creating but couldn't do the same thing to the metal the coins were made of.   If you don't want to destroy the value of your money you have to base it on something of value.  Such that gold is the value that keeps our money constant, gold is money, and it's as durable as possible because it doesn't burn away, doesn't degrade in time, doesn't devalue because it becomes torn or ripped or stamped, or crushed, or melted, or anything else you want to do to it, save vaporize it.

2) That it's as difficult for the average person to duplicate as possible.  Regulation and tight controls on money production also serve current monetary policy.   The central bank doesn't want competing currencies.  That would be another solution unto itself we haven't broached here yet and probably should.    The federal government has no interest in individuals minting their own coins as money because that directly threatens the fiat system.   If you want to fix the system you have to push against it until our illustrious leaders find the political will to do something about it.   The fact is, eventually nobody would even use the dollar values stamped on real gold and silver money because the value would quickly become obsolete due to inflation.  The weights and measures of the Liberty coins of recent years are case in point.  I nabbed one myself on Ebay several years ago.  It's a conversation piece in its own right.

3) That it should be as worthless as possible.  Physical currency perhaps.  The value of money, the intrinsic value of the money the worthless physical currency represents, should be anything but worthless, that's why we want to end the Fed in the first place.   It must meet all of the criteria I've listed several times throughout this thread and if it doesn't, it's a sub-optimal alternative at best, and in the case of tulip bulbs, a ridiculous alternative.


The stability and value of a currency (as money) is based solely on its supply.

Not quite.  It's based on the change in supply.   As baselines go, the market doesn't care whether a hundred billion dollars or a hundred trillion dollars serves the economy.   The spot price of gold, just like the basket of commodities, doesn't matter so long as value can't be printed out of nothing and there's always a storehouse of value keeping that value constant.  In weight.  There's no distinction here either to make you run away from gold.  There is plenty of distinction to make you embrace it.   Since the underlying value is in weight and not in spot price, we should use bases that have historical value and can't be wiped out by climate changes, by heat, by oxygen, by erosion, by lack of portability, and all the other reasons I'm not going to keep repeating.  Nobody is going to want to exchange their dollars for putrid sausages or anything else that they can't sell on the open market after even their pork-based currency went belly up.  I can't sell oil on Ebay.  I can't sell a lot of things on Ebay.   Gold, like silver, is one thing I can sell and not only sell for full value, but even for above full value.   What else can achieve that?  


Shouldn't such a huge loss be reflected somehow by the currency of the country?

Somehow how?  That reflection should be mitigated by prudent weights and measures that don't deal in destructible, perishable goods that are fine today and spoiled tomorrow, huge loss or not.  And that's just another fold in the issue that's missing the larger point.   If I can't exchange my currency for a stable amount of something I can sell, that money is only worth as much as God knows what, even without the Federal Reserve system.

Again, even just replacing the Fed with open float on the world market and letting the dollar value itself on macro economic merits is good enough for me without giving the federal government even more incentive to manipulate industries it has no business being in already.  None of these ideas mean anything under the auspices of a central bank.  They replace the purpose for having central bankers in the first place, sans the Fed's new "dual mandate" i.e. conflict of interest.  And none of these ideas are even possible under a central banking system because they will not let go of their power unless they're forced to by Congress.

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#103    sam12six

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Posted 04 October 2012 - 10:58 AM

View PostYamato, on 04 October 2012 - 10:01 AM, said:

is that your statements and loyalty to the gold standard don't match the definition of money that you've accepted on the surface as something that represents value.

HOW NOT?   I've got over 6000 years proving you wrong.   Find me another form of money from 6000 years ago still in circulation today.  Good luck.

Oh, my bad. I wasn't aware that you could walk into any stores and hand them a chunk of gold to buy something...

View PostYamato, on 04 October 2012 - 10:01 AM, said:

Gold isn't any more outdated than paper, or grain, or work, or pork.  So the continuous references to irrelevant examples of obsolescence having nothing to do with this subject aren't making much of a point here.  Unless you think that something like oil, which didn't exist until long after man domesticated fighting horses, makes a better basis for money.  

If you don't have something of historical value to base your money on, it is as good as worthless eventually.  All history proves this is true, and based on current trends, there's no reason I can see to believe that imminent fact has changed because of strange references to horses in the army, evil gold miners, US hegemony, or a computer driven society (am I leaving anything out?).   If you don't know you can get a fixed amount of something for the currency you've got, you won't get it eventually because the increases in money supply the gurus can't stop selling us on will not cease.  There's nothing under it to hold it up.  There is a lack of substantial intrinsic value.  That's the problem we must overcome here.  We thought there was fiat holding ours up but unfortunately 99 years of US history have proven that belief false and if you can acknowledge the video presented here for discussion, you should be able to concede to that too.

You're right about fiat currency only being based on the confidence in the government that backs it. I believe I've mentioned that a couple of times. You still don't seem to understand what money is though. If you trade a commodity for something, it's barter. If you take something mostly worthless and use it to represent the value of a commodity, it's money. You want to go to a system where the country buys up commodities and passes them out to the people. Best of luck.

View PostYamato, on 04 October 2012 - 10:01 AM, said:

Let's examine your three criteria for money:
1) That it's as durable as possible.   Is paper as durable as possible?  Then why does the papered-over world not agree with you?   And I already see you're against valuable coins.  That fits into the Fed's MO who quickly had to stop making valuable coins when it realized that it was printing the value right out of the money it was creating but couldn't do the same thing to the metal the coins were made of.   If you don't want to destroy the value of your money you have to base it on something of value.  Such that gold is the value that keeps our money constant, gold is money, and it's as durable as possible because it doesn't burn away, doesn't degrade in time, doesn't devalue because it becomes torn or ripped or stamped, or crushed, or melted, or anything else you want to do to it, save vaporize it.

OK, hmmm... what to say. OK, trading commodities is barter. Trading something that is otherwise mostly useless but represents value is money. In today's world, gold is not money. Yes, gold is more durable than paper. It's also a tad more expensive for a government to mint money out of it than the far less valuable paper. But maybe you're right, when they first started using gold as money because there was no real non-decorative use for it, paper was far more valuable a commodity. Historically speaking, isn't it great that we're using paper money since it's more valuable than gold? Oh wait, things change. Dang.

View PostYamato, on 04 October 2012 - 10:01 AM, said:

2) That it's as difficult for the average person to duplicate as possible.  Regulation and tight controls on money production also serve current monetary policy.   The central bank doesn't want competing currencies.  That would be another solution unto itself we haven't broached here yet and probably should. The federal government has no interest in individuals minting their own coins as money because that directly threatens the fiat system.   If you want to fix the system you have to push against it until our illustrious leaders find the political will to do something about it.   The fact is, eventually nobody would even use the dollar values stamped on real gold and silver money because the value would quickly become obsolete due to inflation.  The weights and measures of the Liberty coins of recent years are case in point.  I nabbed one myself on Ebay several years ago.  It's a conversation piece in its own right.

Competing currencies within a country is pretty dumb. The country has an official currency. Who's to compete? The states against each other? Or were you talking about letting more private corporations than the Fed get into the game? Your last point is one of the reasons I've said repeatedly that using a valuable material as money is a bad idea.

View PostYamato, on 04 October 2012 - 10:01 AM, said:

3) That it should be as worthless as possible.  Physical currency perhaps.  The value of money, the intrinsic value of the money the worthless physical currency represents, should be anything but worthless, that's why we want to end the Fed in the first place.   It must meet all of the criteria I've listed several times throughout this thread and if it doesn't, it's a sub-optimal alternative at best, and in the case of tulip bulbs, a ridiculous alternative.

There's nothing wrong with fiat currency. You don't seem to be able to grasp the idea that gold became valuable in large part because it was used as currency. Since the supply was limited, this wide demand for what was at the time the best medium (in terms of durability and worthlessness) for money caused its value to increase.

I'm honestly not sure what you want. Is it coins made of gold? Is it paper money that represents the value of a certain amount of gold (not that you can redeem it for gold, or that the government needs to be honest about having the gold to back it)?

View PostYamato, on 04 October 2012 - 10:01 AM, said:

The stability and value of a currency (as money) is based solely on its supply.

Not quite.  It's based on the change in supply.   As baselines go, the market doesn't care whether a hundred billion dollars or a hundred trillion dollars serves the economy.   The spot price of gold, just like the basket of commodities, doesn't matter so long as value can't be printed out of nothing and there's always a storehouse of value keeping that value constant.  In weight.  There's no distinction here either to make you run away from gold.  There is plenty of distinction to make you embrace it.   Since the underlying value is in weight and not in spot price, we should use bases that have historical value and can't be wiped out by climate changes, by heat, by oxygen, by erosion, by lack of portability, and all the other reasons I'm not going to keep repeating.  Nobody is going to want to exchange their dollars for putrid sausages or anything else that they can't sell on the open market after even their pork-based currency went belly up.  I can't sell oil on Ebay.  I can't sell a lot of things on Ebay.   Gold, like silver, is one thing I can sell and not only sell for full value, but even for above full value.   What else can achieve that?  

I see what you're saying. You want our currency based on something that can't degrade. Would a monster vault full of plastic suit you? No, you want it to be gold. It is shiny. If ancient civilizations could formulate it, there's no way they would have used plastic instead of gold as their money medium, right? I mean, the fact that civilizations throughout history have used virtually every useless material available to them to create money doesn't show us that it's a feasible option?


View PostYamato, on 04 October 2012 - 10:01 AM, said:

Shouldn't such a huge loss be reflected somehow by the currency of the country?

Somehow how?  That reflection should be mitigated by prudent weights and measures that don't deal in destructible, perishable goods that are fine today and spoiled tomorrow, huge loss or not.  And that's just another fold in the issue that's missing the larger point.   If I can't exchange my currency for a stable amount of something I can sell, that money is only worth as much as God knows what, even without the Federal Reserve system.

Again, even just replacing the Fed with open float on the world market and letting the dollar value itself on macro economic merits is good enough for me without giving the federal government even more incentive to manipulate industries it has no business being in already.  None of these ideas mean anything under the auspices of a central bank.  They replace the purpose for having central bankers in the first place, sans the Fed's new "dual mandate" i.e. conflict of interest.  And none of these ideas are even possible under a central banking system because they will not let go of their power unless they're forced to by Congress.

What a surprise, we're butting up against the fact that you don't seem to realize what money is again. Money is a promise (in the modern world, a promise by a government). It's a way of overcoming the big weakness of the barter system. It's a token that represents value. It only works if everyone agrees on what it's worth. All the major currencies in circulation today work because (as an example) every dollar bill is worth the same as every other dollar bill. Even if the government could amass enough commodities to match the <GOOD GOD!!>$ in existence today, there would be no purpose to it if people could show up at this imaginary super Fort Knox and demand to trade in their money for the commodity.

If you must have gold, have it. I'll even tell you a secret, you can use any recognized fiat currency to buy it. If you want to trade that gold for food instead of paper and can find someone who wants to trade food for a shiny piece of metal, awesome. Barter on an international scale is pretty awkward though.


#104    questionmark

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Posted 04 October 2012 - 11:07 AM

View Postsam12six, on 04 October 2012 - 10:58 AM, said:

Oh, my bad. I wasn't aware that you could walk into any stores and hand them a chunk of gold to buy something...

Oh come on, give the kid a break, he sincerely believes that, once the monetary system has failed, he can go to McDonalds with a scale and a file and file a Big Mac's worth of gold off a Kruger rand..

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#105    sam12six

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Posted 04 October 2012 - 12:23 PM

View Postquestionmark, on 04 October 2012 - 11:07 AM, said:

Oh come on, give the kid a break, he sincerely believes that, once the monetary system has failed, he can go to McDonalds with a scale and a file and file a Big Mac's worth of gold off a Kruger rand..

I know and I'm being ruder and a little more sarcastic than necessary because I have friends who believe this too. Sure, buying gold might be a good idea. Whether it's a self-fulfilling prophecy or not, gold has historically gone up in tough economic times. That concept doesn't bother me at all. I have had pretty much this entire discussion with friends in real life and it gets frustrating when they try to apply the concept to something as large as the US dollar supply and think that means all Americans will be sitting on a pot of gold even if our economy collapses.

Anyway, I'm bowing out of the discussion anyway because it's reached the point where we'll only run around in circles if it continues.





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