226 replies to this topic

[Yamato]

[Supersquatch]

I learned in a constitution class that, for some reason, America's currency was taken off the gold and silver standards. I don't see how that makes any sense, as that's how we define how much our money is worth. Now we have inflation. Instead, it is now controlled by the Federal Reserve, which is neither federal nor a reserve.

[ninjadude]

Taylor Reints, on 26 September 2012 - 12:24 AM, said:

as that's how we define how much our money is worth.

No it's not. For some time now. Another person living in the past.

[synchronomy]

It's a fiat currency.  It's based on the net worth of the economy.  Gross domestic product etc.
Many countries have the same system.
With the catastrophic economic global environment of recent years, some countries have been buying gold.  China and India have been buying staggering amounts in recent years.
China, owns our butts anyway...they're buying up gold to make sure it stays that way.

[Supersquatch]

ninjadude, on 26 September 2012 - 01:24 AM, said:

No it's not. For some time now. Another person living in the past.

I know it has not been for a while now. However, look at the inflation of regular items you buy at the grocery store. By the way, I'm not nostalgic.

[synchronomy]

Taylor Reints, on 26 September 2012 - 02:48 AM, said:

I know it has not been for a while now. However, look at the inflation of regular items you buy at the grocery store. By the way, I'm not nostalgic.

There have been many times in many countries when inflation has been far higher than anything seen since the fiat system was adopted.  Inflation has been going on since humans first develped currency.
The inflation of recent years is nothing new, if fact it's pretty damn good compared to what I've seen in my lifetime.
Read up on the Oil Embargo and the Energy Crisis of the 70's.  Look up the interest rates/inflation rates of the 79's and 80's.

Edited by synchronomy, 26 September 2012 - 03:01 AM.

[and then]

synchronomy, on 26 September 2012 - 02:59 AM, said:

There have been many times in many countries when inflation has been far higher than anything seen since the fiat system was adopted.  Inflation has been going on since humans first develped currency.
The inflation of recent years is nothing new, if fact it's pretty damn good compared to what I've seen in my lifetime.
Read up on the Oil Embargo and the Energy Crisis of the 70's.  Look up the interest rates/inflation rates of the 79's and 80's.

I remember it well.  It was an absolute choke hold on economic activity.  It seems we are well on the way back to the past.

[acidhead]

yeah... just keep pumping the money supply and everything will be fine........ moron talk

[Br Cornelius]

acidhead, on 26 September 2012 - 03:55 AM, said:

yeah... just keep pumping the money supply and everything will be fine........ moron talk

Simply pointing out the problem isn't a solution, and the Gold standard is just an appealing but naive solution to the problem.

Robert Anton Wilson talks about the true nature of money;




Br Cornelius

Edited by Br Cornelius, 26 September 2012 - 07:44 AM.

[Yamato]

Br Cornelius, on 26 September 2012 - 07:00 AM, said:

Simply pointing out the problem isn't a solution, and the Gold standard is just an appealing but naive solution to the problem.

Robert Anton Wilson talks about the true nature of money;




Br Cornelius

Wilson has the truth of it.  You're arguing with the wrong people.  You should tell questionmark that Federal Reserve Notes aren't money immediately because that's the only example of money he's got.    Explain how the gold standard is appealing.  Please explain how it's naive.

We're way past done with problem recognition.  Let's enter the solutions phase.   I am providing the solution and you're not explaining, other than making a lot of empty statements, what's wrong with it.  What's the problem for the hundred years before the Fed was created and the dollar was stable?   What's the alternative to magic wands and magic zero percent interest rates?

[Br Cornelius]

You simply choose to believe that your pet fiction has more intrinsic value than the feds. That naive.

Br Cornelius

[questionmark]

Yamato, on 26 September 2012 - 03:36 PM, said:

Wilson has the truth of it.  You're arguing with the wrong people.  You should tell questionmark that Federal Reserve Notes aren't money immediately because that's the only example of money he's got. Explain how the gold standard is appealing.  Please explain how it's naive.

We're way past done with problem recognition.  Let's enter the solutions phase.   I am providing the solution and you're not explaining, other than making a lot of empty statements, what's wrong with it.  What's the problem for the hundred years before the Fed was created and the dollar was stable?   What's the alternative to magic wands and magic zero percent interest rates?

I don't get why you are beating the dead horse gold. We know that gold is limited and that there is not enough of it to even guarantee the money in circulation.

What you are advocating is a state directed economy where companies are told: "Yo, when you reach 2% growth this year you have to stop because we are not mining enough gold to cover it or there won't be enough money to sell your stuff."

If you want a commodity backed currency the minimum you have to do is to find one that can be expanded to cover 88 million new people every year. And that gold can not.

It is naive to base currency on something that does not even cover the current need of money in circulation.

[Br Cornelius]

To illustrate the point that there is nothing magical about Gold and that a Gold based economy shares almost all of the flaws of Fiat currency;

Quote

THE MONETARY SYSTEM we have inherited is more than 2,000
years old. The German word for money, which is "Geld,"
links it rather precisely to its origin which was gold. Gold,
a fairly useless metal except for jewelry and ornaments,
became the preferred exchange medium around 700
B.C. in the Roman Empire. Money always meant
coinage. This was the concept which was incorporated in
the U.S. Constitution. Gold and silver coins (or their
depository receipts) were the only fully legal tender in the
U.S.A. until 1934. To this day, many people - mainly
those who see the disadvantages of the practically
unlimited possibilities for creating paper money- favor a
return to the gold standard for money.
When Silvio Gesell published his book "Die Natürliche
Wirtschaftsordnung" (The Natural Economic Order) in
1904, about three-quarters of the book dealt with this issue.
(26) Against all the established economists of his time he tried
to prove theoretically and with practical examples that the gold
standard was not only unnecessary but detrimental
to a well-functioning monetary system based on interest
free money.
Today, we know that the gold standard is not a nec-
essary precondition. There is no money system in the world
now which is based on the gold standard. John Maynard
Keynes, who was well acquainted with Silvio Gesell's work,
helped to eliminate this barrier to a well-functioning
economy in the 1930s. What he forgot to advocate, how-
ever, was the other essential ingredient: the replacement
of interest by a circulation fee. This is largely why we are
in trouble now and will be at regular intervals until we
have learned the lesson.

http://userpage.fu-b...glish/chap4.htm

I see the flaws in the Fed system but don't want a barely better solution to replace it.

This site offers a wealth of suggestion for alternatives to the Fed vs Gold false dichotomy.



Br Cornelius

Edited by Br Cornelius, 26 September 2012 - 04:00 PM.

[questionmark]

Br Cornelius, on 26 September 2012 - 03:54 PM, said:

To illustrate the point that there is nothing magical about Gold and that a Gold based economy shares almost all of the flaws of Fiat currency;



http://userpage.fu-b...glish/chap4.htm

I see the flaws in the Fed system but don't want a barely better solution to replace it.

Br Cornelius

The biggest flaw is that, to the contrary of the intention, the FED is not as independent as once was intended and that those who have the political oversight of the FED, as a rule, know as much about economy as I know about being pope (which is quite a distance away from an apostate Jew like me).

The second biggest flaw of the fed is that it seems to recruit its personal from the same old Harvard Good Boys Club. I can't recall an outsider ever getting into a meaningful position there. That in itself creates a interest felting that makes it incompatible with its independence.

But those problems are not resolved by introducing some kind of restrictive standard or by putting it under direct supervision of politicians (i.e. Audit the FED), that would just elevate the goat to the position of grounds caretaker.

[Corp]

Solutions are needed, but returning to a system that can't support the economy in any way is no solution. Gold isn't some magically cure all and it can have many of the same problems paper money can. Just look at the Spanish Empire. They found huge amounts of gold and silver in Latin America and what happened? Massive inflation which caused their economy to tank. Trying to turn back the clock to some mythical golden age of America isn't the answer.

Maybe we should just go back to the bartar system. Now who has change for a goat?