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The US Dollar vs. The Gold Standard

gold dollar inflation fed federal reserve

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227 replies to this topic

#226    Karlis

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Posted 03 November 2012 - 02:53 AM

View Postquestionmark, on 02 November 2012 - 02:45 PM, said:

...  a too stable currency can cause a bust (see Spain 1557). ...
Hi Questionmark,

Sorry, but I could not find any references as to how "a stable currency" was connected with Spain's bankruptcy in 1557. Below are some excerpts from a website dealing with The economic problems of Spain. I don't see any relationship with "a stable  currency" and Spain's economic problems there.

Fact is -- I do see some parallels between the root causes of Spain's bankruptcies and the problems facing the USA now.
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... Philip’s weakness for grandiose projects also put Spain into serious economic difficulties. ...

... Philip never raised enough cash to cover his expenditure and as a result had to declare state ‘bankruptcies’ in 1557, 1560, 1576 and 1596. As the reign went on Spain’s economic problems grew worse and eventually Spain had amassed a debt of 85.5 million ducats whilst his average annual income was 9.7 million. ...

... The economic problems of Spain were also serious in relation to Philip’s military; not just the effect of fighting wars on three fronts ...

... In order to solve his financial problems and establish a firm foundation for future expenditure, Philip needed a prolonged period of peace in which he could reform his exchequer and invest in Spanish industry. He never achieved this, instead doing the reverse with fighting multiple wars and drawing investment away from industry ...
Source


#227    questionmark

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Posted 03 November 2012 - 08:50 AM

View PostKarlis, on 03 November 2012 - 02:53 AM, said:

Hi Questionmark,

Sorry, but I could not find any references as to how "a stable currency" was connected with Spain's bankruptcy in 1557. Below are some excerpts from a website dealing with The economic problems of Spain. I don't see any relationship with "a stable  currency" and Spain's economic problems there.

Fact is -- I do see some parallels between the root causes of Spain's bankruptcies and the problems facing the USA now.
-=-=-=-


... Philip’s weakness for grandiose projects also put Spain into serious economic difficulties. ...

... Philip never raised enough cash to cover his expenditure and as a result had to declare state ‘bankruptcies’ in 1557, 1560, 1576 and 1596. As the reign went on Spain’s economic problems grew worse and eventually Spain had amassed a debt of 85.5 million ducats whilst his average annual income was 9.7 million. ...

... The economic problems of Spain were also serious in relation to Philip’s military; not just the effect of fighting wars on three fronts ...

... In order to solve his financial problems and establish a firm foundation for future expenditure, Philip needed a prolonged period of peace in which he could reform his exchequer and invest in Spanish industry. He never achieved this, instead doing the reverse with fighting multiple wars and drawing investment away from industry ...
Source

Correct.  A little inflation could have helped Phillip a long way in paying his debt. The problem Phillip had there is that the Doblon was as rock solid as it gets.

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#228    Gummug

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Posted 01 August 2013 - 05:06 PM

View Postquestionmark, 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 haven't been to this thread for awhile, I only came back because of a reference to it in an ongoing debate between Yamato and Br Cornelius. Anyway, sorry about that. Doesn't the constitution say, that the power to produce money belongs to Congress? "Delegation" of that power to the Fed, i.e., to private interests, could be seen as shirking its duty, in a very harmful way, without much stretch of imagination. My opinion, for what it's worth.

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